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As
filed
with
the
U.S.
Securities
and
Exchange
Commission
on
June
23,
2022
UNITED
STATES
SECURITIES
AND
EXCHANGE
COMMISSION
Washington,
D.C.
20549
FORM
20-F
(Mark
One)
REGISTRATION
STATEMENT
PURSUANT
TO
SECTION
12(b)
OR
(g)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
OR
È
ANNUAL
REPORT
PURSUANT
TO
SECTION
13
OR
15(d)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
For
the
fiscal
year
ended:
March
31,
2022
OR
TRANSITION
REPORT
PURSUANT
TO
SECTION
13
OR
15(d)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
OR
SHELL
COMPANY
REPORT
PURSUANT
TO
SECTION
13
OR
15(d)
OF
THE
SECURITIES
EXCHANGE
ACT
OF
1934
Commission
file
number:
001-14948
TOYOTA
JIDOSHA
KABUSHIKI
KAISHA
(Exact
name
of
registrant
as
specified
in
its
charter)
TOYOTA
MOTOR
CORPORATION
(Translation
of
registrant’s
name
into
English)
Japan
(Jurisdiction
of
incorporation
or
organization)
1
Toyota-cho,
Toyota
City
Aichi
Prefecture
471-8571
Japan
+81
565
28-2121
(Address
of
principal
executive
offices)
Masayoshi
Hachisuka
Telephone
number:
+81
565
28-2121
Facsimile
number:
+81
565
23-5800
Address:
1
Toyota-cho,
Toyota
City,
Aichi
Prefecture
471-8571,
Japan
(Name,
telephone,
e-mail
and/or
facsimile
number
and
address
of
registrant’s
contact
person)
Securities
registered
or
to
be
registered
pursuant
to
Section
12(b)
of
the
Act:
Title
of
each
class
Trading
Symbol(s)
Name
of
each
exchange
on
which
registered
American
Depositary
Shares*
Common
Stock**
TM
The
New
York
Stock
Exchange
*
Each American Depositary Share representing ten shares of the registrant’s Common Stock.
** No par value.
Not for trading, but
only in connection with the registration of American Depositary Shares, pursuant to the
requirements of the U.S. Securities and
Exchange Commission.
Securities
registered
or
to
be
registered
pursuant
to
Section
12(g)
of
the
Act:
None
Securities
for
which
there
is
a
reporting
obligation
pursuant
to
Section
15(d)
of
the
Act:
None
Indicate the
number
of
outstanding
shares
of
each
of
the
issuer’s classes
of
capital
or
common
stock as
of
the
close
of
the
period
covered
by
the
annual
report:
13,778,301,544
shares
of
common
stock
(including
295,944,975
shares
of
common
stock
in
the
form
of
American
Depositary
Shares)
as
of
March
31,
2022
Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act: Yes
È
No
If
this
report
is
an
annual
or
transition
report,
indicate
by
check
mark
if
the
registrant
is
not
required
to
file
reports
pursuant
to
Section
13
or
15(d)
of
the
Securities Exchange Act of 1934: Yes
No
È
Indicate by check
mark whether
the
registrant (1) has
filed all
reports required to
be filed
by Section
13 or
15(d) of the
Securities Exchange Act
of 1934 during
the preceding
12
months
(or
for
such
shorter
period
that the
registrant
was
required
to
file such
reports),
and
(2) has
been
subject to
such
filing requirements
for the
past 90 days: Yes
È
No
Indicate
by
check
mark
whether
the
registrant
has
submitted
electronically
every
Interactive
Data
File
required
to
be
submitted
pursuant
to
Rule
405
of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files):
Yes
È
No
Indicate
by
check
mark
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
or
an
emerging
growth
company.
See
definition of “large accelerated filer,”
“accelerated filer,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
È
Accelerated filer
Non-accelerated filer
Emerging growth company
If an emerging
growth
company
that prepares
its
financial statements
in
acco
rdance
with U.S.
GAAP,
indicate
by check
mark
if the registrant
has electe
d
not to
use the
extended
transition
period
for
complying
with
any
new
or
revised
fina
ncial
accounting
standards†
provided
pursuant
to
Section
13(a)
of
the
Ex
ch
an
ge
A
ct
:
The
term
“new
or
revised
financial
accounting
standard”
refers
to
any
update
issued
by
the
Financial
Accounting
Standards
Board
to
its
Accounting
Standards
Codification after April 5, 2012.
Indicate
by
check
mark
whether
the
registrant
has
filed
a
report
on
and
attestation
to
its
management’s
assessment
of
the
effectiveness
of
its
internal
control
over
financial
reporting
under
Section
404(b)
of
the
Sarbanes-Oxley
Act
(15
U.S.C.
7262(b))
by
the
registered
public
accounting
firm
that
prepared
or
issued
its
audit report.
È
Indicate by check mark which basis of accounting the
registrant has used to prepare the financial
statements included in this
filing:
U.S. GAAP
International Financial Reporting
Standards as issued by the International
Accounting Standards Board
È
Other
If
“Other”
has
been
checked
in
response
to
the
previous
question,
indicate
by
check
mark
which
financial
statement
item
the
registrant
has
elected
to
follow:
Item
17
Item
18
If this is an annual report, indicate
by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes
No
È
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
AND ADVISERS
..........
1
ITEM 2.
OFFER STATISTICS AND EXPECTED
TIMETABLE
...........................
1
ITEM 3.
KEY INFORMATION
.....................................................
1
3.A
[RESERVED]
............................................................
1
3.B
CAPITALIZATION AND INDEBTEDNESS
...................................
1
3.C
REASONS FOR THE OFFER
AND USE OF PROCEEDS
........................
1
3.D
RISK FACTORS
..........................................................
1
ITEM 4.
INFORMATION ON THE COMPANY
.......................................
6
4.A
HISTORY AND DEVELOPMENT
OF THE COMPANY
.........................
6
4.B
BUSINESS OVERVIEW
...................................................
6
4.C
ORGANIZATIONAL STRUCTURE
..........................................
4
5
4.D
PROPERTY, PLANTS AND
EQUIPMENT
....................................
4
6
ITEM 4A.
UNRESOLVED STAFF COMMENTS
........................................
4
7
ITEM 5.
OPERATING AND FINANCIAL REVIEW
AND PROSPECTS
....................
4
7
5.A
OPERATING RESULTS
...................................................
4
7
5.B
LIQUIDITY AND CAPITAL RESOURCES
....................................
7
0
5.C
RESEARCH AND DEVELOPMENT,
PATENTS AND LICENSES
.................
7
4
5.D
TREND INFORMATION
...................................................
7
6
5.E
CRITICAL ACCOUNTING ESTIMATES
.....................................
7
6
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT
AND EMPLOYEES
....................
7
6
6.A
DIRECTORS AND SENIOR MANAGEMENT
.................................
7
6
6.B
COMPENSATION
........................................................
8
3
6.C
BOARD PRACTICES
.....................................................
8
7
6.D
EMPLOYEES
............................................................
8
9
6.E
SHARE OWNERSHIP
.....................................................
8
9
ITEM 7.
MAJOR SHAREHOLDERS AND
RELATED PARTY TRANSACTIONS
............
9
1
7.A
MAJOR SHAREHOLDERS
.................................................
9
1
7.B
RELATED PARTY TRANSACTIONS
........................................
9
2
7.C
INTERESTS OF EXPERTS AND
COUNSEL
..................................
9
2
ITEM 8.
FINANCIAL INFORMATION
..............................................
9
2
8.A
CONSOLIDATED STATEMENTS
AND OTHER FINANCIAL INFORMATION
.....
9
2
8.B
SIGNIFICANT CHANGES
.................................................
9
4
ITEM 9.
THE OFFER AND LISTING
................................................
9
4
9.A
LISTING DETAILS
.......................................................
9
4
9.B
PLAN OF DISTRIBUTION
.................................................
9
4
9.C
MARKETS
..............................................................
9
4
9.D
SELLING SHAREHOLDERS
...............................................
9
5
9.E
DILUTION
..............................................................
9
5
9.F
EXPENSES OF THE ISSUE
................................................
9
5
ITEM 10.
ADDITIONAL INFORMATION
.............................................
9
5
10.A
SHARE CAPITAL
........................................................
9
5
10.B
MEMORANDUM AND ARTICLES OF
ASSOCIATION
.........................
9
5
10.C
MATERIAL CONTRACTS
.................................................
1
0
2
10.D
EXCHANGE CONTROLS
..................................................
1
0
2
10.E
TAXATION
.............................................................
1
0
6
10.F
DIVIDENDS AND PAYING AGENTS
........................................
1
1
2
10.G
STATEMENT BY EXPERTS
...............................................
1
1
2
10.H
DOCUMENTS ON DISPLAY
...............................................
1
1
2
10.I
SUBSIDIARY INFORMATION
.............................................
1
1
3
ITEM 11.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
. . .
113
ITEM 12.
DESCRIPTION OF SECURITIES OTHER
THAN EQUITY SECURITIES
...........
1
1
3
12.A
DEBT SECURITIES
.......................................................
1
1
3
12.B
WARRANTS AND RIGHTS
................................................
1
1
3
12.C
OTHER SECURITIES
.....................................................
1
1
3
12.D
AMERICAN DEPOSITARY SHARES
........................................
1
1
3
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES
AND DELINQUENCIES
................
1
1
5
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND
USE OF PROCEEDS
......................................................
1
1
5
ITEM 15.
CONTROLS AND PROCEDURES
...........................................
1
1
5
ITEM 16.
[RESERVED]
............................................................
1
1
6
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
..................................
1
1
6
ITEM 16B.
CODE OF ETHICS
........................................................
1
1
6
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES
AND SERVICES
...........................
1
1
7
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES
. . .
118
ITEM 16E.
PURCHASES OF EQUITY SECURITIES
BY THE ISSUER AND AFFILIATED
PURCHASERS
...........................................................
1
1
8
ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING
ACCOUNTANT
...................
1
1
9
ITEM 16G.
CORPORATE GOVERNANCE
..............................................
1
1
9
ITEM 16H.
MINE SAFETY DISCLOSURE
..............................................
1
2
2
ITEM 16I.
DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT
INSPECTIONS
...........................................................
1
2
2
ITEM 17.
FINANCIAL STATEMENTS
...............................................
1
2
3
ITEM 18.
FINANCIAL STATEMENTS
...............................................
1
2
3
ITEM 19.
EXHIBITS
...............................................................
1
2
4
As
used
in
this
annual
report,
the
term
“fiscal”
preceding
a
year
means
the
twelve-month
period
ended
March
31
of
the
year
referred
to.
All
other
references
to
years
refer
to
the
applicable
calendar
year
unless
the
context
otherwise
requires.
Unless
the
context
otherwise
requires
or
as
otherwise
expressly
stated,
references
in
this
prospectus
supplement
to
“Toyota,”
“we,”
“us,”
“our”
and
similar
terms
refer
to
Toyota
Motor
Corporation
and its consolidated subsidiaries,
as a group.
Toyota’s
consolidated
financial
statements
in
this
annual
report
have
been
prepared
in
accordance
with
International
Financial Reporting
Standards (“IFRS”),
as issued
by the
International
Accounting
Standards Board
(“IASB”).
The
term
“IFRS”
also
includes
International
Accounting
Standards
(“IASs”)
and
the
related
interpretations of the interpretations
committees
(SIC and IFRIC).
CAUTIONARY
STATEMENT
WITH
RESPECT
TO
FORWARD-LOOKING
STATEMENTS
Written
forward-looking
statements
may
appear
in
documents
filed
with
the
SEC,
including
this
annual
report, documents incorporated
by reference, reports to shareholders
and other communications.
The
U.S.
Private
Securities
Litigation
Reform
Act
of
1995
provides
a
“safe
harbor”
for
forward-looking
information
to
encourage
companies
to
provide
prospective
information
about
themselves
without
fear
of
litigation
so
long
as
the
information
is
identified
as
forward-looking
and
is
accompanied
by
meaningful
cautionary
statements
identifying
important
factors
that
could
cause
actual
results
to
differ
materially
from
those
projected in the information.
Toyota relies on this safe harbor
in making forward-looking statements.
Forward-looking
statements
appear
in
a
number
of
places
in
this
annual
report
and
include
statements
regarding
Toyota’s
current
intent,
belief,
targets
or
expectations
or
those
of
its
management.
In
many,
but
not
all
cases,
words
such
as
“aim,”
“anticipate,”
“believe,”
“estimate,”
“expect,”
“hope,”
“intend,”
“may,”
“plan,”
“predict,”
“probability,”
“risk,”
“should,”
“will,”
“would,”
and
similar
expressions,
are
used
as
they
relate
to
Toyota
or
its
management,
to
identify
forward-looking
statements.
These
statements
reflect
Toyota’s
current
views with
respect
to future
events and
are subject
to risks,
uncertainties
and assumptions.
Should
one or
more of
these
risks
or
uncertainties
materialize
or
should
underlying
assumptions
prove
incorrect,
actual
results
may vary
materially from those
which are anticipated, aimed at,
believed, estimated, expected,
intended or planned.
Forward-looking
statements
are
not
guarantees
of
future
performance
and
involve
risks
and
uncertainties.
Actual
results
may
differ
from
those
in
forward-looking
statements
as
a
result
of
various
factors.
Important
factors
that
could
cause
actual
results
to
differ
materially
from
estimates
or
forecasts
contained
in
the
forward-
looking
statements
are
identified
in
“Risk
Factors”
and
elsewhere
in
this
annual
report,
and
include,
among
others:
(i)
changes
in
economic
conditions,
market
demand,
and
the
competitive
environment
affecting
the
automotive markets in Japan, North
America, Europe, Asia and other markets
in which Toyota operates;
(ii)
fluctuations
in
currency
exchange
rates
(particularly
with
respect
to
the
value
of
the
Japanese
yen,
the
U.S.
dollar,
the
euro,
the
Australian
dollar,
the
Russian
ruble,
the
Canadian
dollar
and
the
British
pound), stock prices and interest rates
fluctuations;
(iii)
changes
in
funding
environment
in
financial
markets
and
increased
competition
in
the
financial
services industry;
(iv) Toyota’s ability to market
and distribute effectively;
(v)
Toyota’s
ability
to
realize
production
efficiencies
and
to
implement
capital
expenditures
at
the
levels and times planned by management;
(vi)
changes
in
the
laws,
regulations
and
government
policies
in
the
markets
in
which
Toyota
operates
that
affect
Toyota’s
automotive
operations,
particularly
laws,
regulations
and
government
policies
relating
to
vehicle
safety
including
remedial
measures
such
as
recalls,
trade,
environmental
protection,
vehicle
emissions
and
vehicle
fuel
economy,
as
well
as
changes
in
laws,
regulations
and
government
policies
that
affect
Toyota’s
other
operations,
including
the
outcome
of
current
and
future
litigation
and
other
legal
proceedings, government proceedings and
investigations;
(vii) political and economic
instability in the markets
in which Toyota operates;
(viii)
Toyota’s
ability
to
timely
develop
and
achieve
market
acceptance
of
new
products
that
meet
customer demand;
(ix) any damage to Toyota’s brand image;
(x) Toyota’s reliance on various suppliers
for the provision of supplies;
(xi) increases in prices of
raw materials;
(xii) Toyota’s reliance on various
digital and information
technologies, as well as information
security;
(xiii)
fuel
shortages
or
interruptions
in
electricity,
transportation
systems,
labor
strikes,
work
stoppages
or
other
interruptions
to,
or
difficulties
in,
the
employment
of
labor
in
the
major
markets
where
Toyota
purchases
materials,
components
and
supplies
for
the
production
of
its
products
or
where
its
products
are
produced, distributed or sold;
(xiv)
the
impact
of
natural
calamities,
epidemics,
political
and
economic
instability,
fuel
shortages
or
interruptions
in
social
infrastructure,
wars,
terrorism
and
labor
strikes,
including
their
negative
effect
on
Toyota’s vehicle production and sales;
and
(xv) the impact of climate
change and the transition towards
a low-carbon economy.
PART
I
ITEM
1.
IDENTITY
OF
DIRECTORS,
SENIOR
MANAGEMENT
AND
ADVISERS
Not applicable.
ITEM
2.
OFFER
STATISTICS
AND
EXPECTED
TIMETABLE
Not applicable.
ITEM
3.
KEY
INFORMATION
3.A
[RESERVED]
3.B
CAPITALIZATION
AND
INDEBTEDNESS
Not applicable.
3.C
REASONS
FOR
THE
OFFER
AND
USE
OF
PROCEEDS
Not applicable.
3.D
RISK
FACTORS
Industry
and
Business
Risks
The
worldwide
automotive
market
is
highly
competitive.
The worldwide
automotive
market
is
highly
competitive.
Toyota faces
intense
competition
from
automotive
manufacturers
in
the
markets
in
which
it
operates.
Competition
in
the
automotive
industry
has
further
intensified
amidst
difficult
overall
market
conditions.
In
addition,
competition
is
likely
to
further
intensify
in light
of
further
continuing
globalization
in
the
worldwide
automotive
industry,
possibly
resulting
in
industry
reorganizations.
Factors
affecting
competition
include
product
quality
and
features,
safety,
reliability,
fuel
economy,
the
amount
of
time
required
for
innovation
and
development,
pricing,
customer
service
and
financing
terms.
Increased
competition
may
lead
to
lower
vehicle
unit
sales,
which
may
result
in
a
further
downward
price
pressure
and
adversely
affect
Toyota’s
financial
condition
and
results
of
operations.
Toyota’s
ability
to
adequately
respond
to
the
recent
rapid
changes
in
the
automotive
market
and
to
maintain
its
competitiveness
will
be
fundamental
to
its
future
success
in
existing
and
new
markets
and
to
maintain
its
market
share.
There
can
be
no
assurances
that
Toyota will be able to compete successfully
in the future.
The
worldwide
automotive
industry
is
highly
volatile.
Each
of
the
markets
in
which
Toyota
competes
has
been
subject
to
considerable
volatility
in
demand.
Demand for
vehicles
depends
to a
large
extent
on economic,
social and
political
conditions in
a given
market and
the
introduction
of
new
vehicles
and
technologies.
As
Toyota’s
revenues
are
derived
from
sales
in
markets
worldwide, economic conditions in such markets
are particularly
important to Toyota.
Reviewing
the
general
economic
environment
for
fiscal
2022,
the
economy
appeared
to
be
headed
toward
a
recovery
due
to
fiscal
and
monetary
policies
adopted
by
various
countries
that
have
supported
the
economy,
coupled
with
the
gradual
relaxation
of
strict
COVID-19
restrictions.
While
the
automotive
market
has
been
subjected
to
global
production
constraints
due
to
components
shortages
caused
by
a
tightening
of
global
supply
of,
and
increasing
demand
for,
semiconductors
and
the
impact
of
COVID-19,
continued
steady
demand
in
countries
such
as the
U.S., China,
and
Japan resulted
in
a
recovery from
last
year.
Geopolitical
tensions
that
have
1
increased
since
February
2022
have
had
a
ripple
effect
globally
in
such
forms
as
soaring
materials
prices,
including
for
raw
materials
and
parts
and
components
for
Toyota’s
vehicles,
which
has
made
it
more
difficult
to
foresee the future.
Changes
in
demand
for
automobiles
are
continuing,
and
it
is
unclear
how
this
situation
will
transition
in
the
future.
Toyota’s
financial
condition
and
results
of
operations may
be
adversely
affected
if the
changes
in
demand
for
automobiles
continues
or
progresses
further.
Demand
may
also
be
affected
by
factors
directly
impacting
vehicle
price
or
the
cost
of
purchasing
and
operating
vehicles
such
as
sales
and
financing
incentives,
prices
of
raw
materials
and
parts
and
components,
cost
of
fuel
and
governmental
regulations
(including
tariffs,
import
regulation
and
other
taxes).
Volatility
in
demand
may
lead
to
lower
vehicle
unit
sales,
which
may
result
in
downward price pressure and adversely affect
Toyota’s financial condition
and results of operations.
Toyota’s
future
success
depends
on
its
ability
to
offer
new,
innovative
and
competitively
priced
products
that
meet
customer
demand
on
a
timely
basis.
Meeting
customer
demand
by
introducing
attractive
new
vehicles
and
reducing
the
amount
of
time
required
for
product
development
are
critical
to
automotive
manufacturers.
In
particular,
it
is
critical
to
meet
customer
demand
with
respect
to
quality,
safety,
reliability
and
sustainability.
The
timely
introduction
of
new
vehicle
models,
at
competitive
prices,
meeting
rapidly
changing
customer
preferences
and
demand
is
more
fundamental
to
Toyota’s
success
than
ever,
as
the
automotive
market
is
rapidly
transforming
in
light
of
the
changing
global
economy.
There
is
no
assurance,
however,
that
Toyota
will
adequately
and
appropriately
respond
to
changing
customer
preferences
and
demand
with
respect
to
quality,
safety,
reliability,
styling,
sustainability
and
other
features in
a
timely
manner.
Even if
Toyota
succeeds in
perceiving
customer
preferences and
demand, there
is
no
assurance
that
Toyota
will
be
capable
of
developing
and
manufacturing
new,
price
competitive
products
in
a
timely
manner
with
its
available
technology,
intellectual
property,
sources
of
raw
materials
and
parts
and
components,
and
production
capacity,
including
cost
reduction
capacity.
Further,
there
is
no
assurance
that
Toyota
will
be
able
to
implement
capital
expenditures
at
the
level
and
times
planned
by
management.
Toyota’s
inability
to
develop
and
offer
products
that
meet
customers’
preferences
and
demand
with
respect
to
quality,
safety,
reliability,
styling,
sustainability
and
other
features
in
a
timely
manner
could
result
in
a
lower
market
share
and
reduced
sales
volumes
and
margins,
and
may
adversely
affect
Toyota’s
financial
condition
and
results
of operations.
Toyota’s
ability
to
market
and
distribute
effectively
is
an
integral
part
of
Toyota’s
successful
sales.
Toyota’s
success
in
the
sale
of
vehicles
depends
on
its
ability
to
market
and
distribute
effectively
based
on
distribution
networks
and
sales
techniques
tailored
to
the
needs
of
its
customers.
There
is
no
assurance
that
Toyota
will
be
able
to
develop
sales
techniques
and
distribution
networks
that
effectively
adapt
to
changing
customer
preferences
or
changes
in
the
geopolitical
and
regulatory
environment
in
the
major
markets
in
which
it
operates.
Toyota’s
inability
to
maintain
well-developed
sales
techniques
and
distribution
networks
may
result
in
decreased sales and market share
and may adversely affect its
financial condition and results
of operations.
Toyota’s
success
is
significantly
impacted
by
its
ability
to
maintain
and
develop
its
brand
image.
In
the
highly
competitive
automotive
industry,
it
is
critical
to
maintain
and
develop
a
brand
image.
In
order
to
maintain
and
develop
a
brand
image,
it
is
necessary
to
further
increase
customers’
confidence
by
providing
safe,
high-quality
products
that
meet
customer
preferences
and
demand.
If
Toyota
is
unable
to
effectively
maintain
and
develop
its
brand
image
as
a
result
of
such
reasons
as
its
inability
to
provide
safe,
high-quality
products
or
as
a
result
of
the
failure
to
promptly
implement
safety
measures
such
as
recalls
when
necessary,
vehicle
unit
sales
and/or
sale
prices
may
decrease,
and
as
a
result
revenues
and
profits
may
not
increase
as
expected or may decrease, adversely
affecting its financial
condition and results of operations.
2
Toyota
relies
on
suppliers
for
the
provision
of
certain
supplies
including
parts,
components
and
raw
materials.
Toyota
purchases
supplies
including
parts,
components
and
raw
materials
from
a
number
of
external
suppliers
located
around
the
world.
For
some
supplies,
Toyota
relies
on
a
single
supplier
or
a
limited
number
of
suppliers,
whose
replacement
with
another
supplier
may
be
difficult.
Inability
to
obtain
supplies
from
a
single
or
limited
source
supplier
may
result
in
difficulty
obtaining
supplies
and
may
restrict
Toyota’s
ability
to
produce
vehicles.
Furthermore,
even
if
Toyota
were
to
rely
on
a
large
number
of
suppliers,
first-tier
suppliers
with
whom
Toyota directly transacts may
in turn rely on a single second-tier
supplier or limited
second-tier suppliers.
Irrespective
of the number
of
suppliers, Toyota’s
ability to
continue to obtain
supplies from
its suppliers
in a
timely
and
cost-effective
manner
is
subject
to
a
number
of
factors,
some
of
which
are
not
within
Toyota’s
control.
These
factors
include
the
ability
of
Toyota’s
suppliers
to
provide
a
continued
source
of
supply,
and
Toyota’s
ability
to
effectively
compete
and
obtain
competitive
prices
from
suppliers.
Circumstances
that
may
adversely
affect
such
abilities
include
geopolitical
tensions
as
well
as
related
governmental
actions
such
as
economic sanctions.
A
loss
of
any
single
or
limited
source
supplier,
or
inability
to
obtain
supplies
from
suppliers
in
a
timely
and
cost-effective
manner,
could
lead
to
increased
costs
or
delays
or
suspensions
in
Toyota’s
production
and
deliveries, which could have an adverse
effect on Toyota’s financial condition
and results of operations.
The
worldwide
financial
services
industry
is
highly
competitive.
The
worldwide
financial
services
industry
is
highly
competitive.
Increased
competition
in
automobile
financing
may
lead
to
decreased
margins.
A
decline
in
Toyota’s
vehicle
unit
sales,
an
increase
in
residual
value
risk
due
to
lower
used
vehicle
prices,
an
increase
in
the
ratio
of
credit
losses
and
increased
funding
costs
are
additional
factors
which
may
impact
Toyota’s
financial
services
operations.
If
Toyota
is
unable
to
adequately
respond
to
the
changes
and
competition
in
automobile
financing,
Toyota’s
financial
services
operations
may
adversely affect its financial
condition and results of
operations.
Toyota’s
operations
and
vehicles
rely
on
various
digital
and
information
technologies,
as
well
as
information
security.
Toyota
depends
on
various
information
technology
networks
and
systems,
some
of
which
are
managed
by
third
parties,
to
process,
transmit
and
store
electronic
information,
including
sensitive
data,
and
to
manage
or
support
a
variety
of
business
processes
and
activities,
including
manufacturing,
research
and
development,
supply
chain
management,
sales
and
accounting.
In
addition,
Toyota’s
vehicles
may
rely
on
various
digital
and
information technologies, including
information service
and driving assistance functions.
Despite
security
measures,
Toyota’s
digital
and
information
technology
networks
and
systems
may
be
vulnerable
to
damage,
disruptions,
shutdowns
due
to
unauthorized
access
or
attacks
by
hackers,
computer
viruses,
breaches
due
to
unauthorized
use,
errors
or
malfeasance
by
employees
and
others
who
have
or
gain
access
to
the
networks
and
systems
Toyota
depends
on,
service
failures
or
bankruptcy
of
third
parties
such
as
software
development
or
cloud
computing
vendors,
power
shortages
and
outages,
and
utility
failures
or
other
catastrophic
events
like
natural
disasters.
In
particular,
cyber-attacks
or
other
intentional
malfeasance
are
increasing
in
terms
of
intensity,
sophistication
and
frequency,
and
Toyota
has
been
and
expects
to
continue
to
be
the
subject
of
such
attacks.
Such
attacks
could
materially
disrupt
critical
operations,
disclose
sensitive
data,
interfere
with
information
services
and
driving
assistance
functions
in
Toyota’s
vehicles,
and/or
give
rise
to
legal
claims
or
proceedings,
liability
or
regulatory
penalties
under
applicable
laws,
which
could
have
an adverse
effect
on
Toyota’s
brand
image
and
its
financial
condition
and
results
of
operations.
Moreover,
similar
attacks
on
Toyota’s
suppliers
and
business
partners
have
had,
and
may
in
the
future
have,
a
similar
negative
impact
on
Toyota.
3
Toyota
is
exposed
to
risks
associated
with
climate
change,
including
the
physical
risks
of
climate
change
and
risks
from
the
transition
to
a
lower-carbon
economy.
Risks
associated
with
climate
change
are
subject
to
increasing
societal,
regulatory
and
political
focus
in
Japan
and
globally.
These
risks
include
the
physical
risks
of
climate
change
and
risks
from
the
transition
to
a
lower-carbon economy.
The
physical
risks
of
climate
change
include
both
acute,
event-driven
risks
such
as
those
relating
to
hurricanes,
floods
and
tornadoes,
as
well
as
longer-term
weather
patterns
and
related
effects,
such
as
sustained
higher
temperatures,
sea
level
rise,
drought
and
increased
wildfires.
Despite
Toyota’s
contingency
planning,
large-scale
disasters
due
to
extreme
weather
conditions
have
in
the
past
harmed,
and
may
in
the
future
again
harm,
Toyota’s
employees
or
its
facilities
and
other
assets,
as
well
as
those
of
Toyota’s
suppliers
and
other
business
partners,
thereby
adversely
affecting
Toyota’s
production,
sales
or
other
operational
capacities.
Large-
scale
disasters
may
also
adversely
affect
the
financial
condition
of
Toyota’s
customers,
and
thereby
demand
for
its products and services.
Transition
risks
are
those
attributable
to
regulatory,
technological
and
market
changes
to
address
the
mitigation
of,
or
adaptation
to,
climate-related
risks.
For
example,
Toyota
is
subject
to
the
risk
of
changes
in
customer
demand
for
vehicles
due
to
such
factors
as
changes
in
laws,
regulations
and
government
policies
relating
to
climate
change,
technological
innovation
to
address
climate
change,
and
new
entrants
into
the
automobile
industry
that
seek
to
capitalize
on
changing
market
dynamics.
Changes
in
customer
demand
may
pose
ancillary
risks
and
challenges,
such
as
Toyota’s
having
to
establish
new,
or
enhance
existing,
supply
networks
in
order
to
source
the
raw
materials,
parts
and
components
necessary
for
it
to
manufacture
the
products
then in demand at
desired volumes
and at competitive
costs. Toyota may
incur significant costs and expenses
as a
result
of
the
materialization
of
such
risks,
or
in
its
efforts
to
mitigate
or
adapt
to
such
risks.
Toyota’s
inability
to
develop
and
offer
products
that
meet
customers’
preferences
and
demand
in
a
timely
manner
could
result
in
a
lower
market
share
and
reduced
sales
volumes
and
margins,
and
may
adversely
affect
Toyota’s
financial
condition and results of operations.
Financial
Market
and
Economic
Risks
Toyota’s
operations
are
subject
to
currency
and
interest
rate
fluctuations.
Toyota
is
sensitive
to
fluctuations
in
foreign
currency
exchange
rates
and
is
principally
exposed
to
fluctuations
in
the
value
of
the
Japanese
yen,
the
U.S.
dollar
and
the
euro
and,
to
a
lesser
extent,
the
Australian
dollar,
the
Russian
ruble,
the
Canadian
dollar
and
the
British
pound.
Toyota’s
consolidated
financial
statements,
which
are
presented
in
Japanese
yen,
are
affected
by
foreign
currency
exchange
fluctuations
through
translation
risk,
and
changes
in
foreign
currency
exchange
rates
may
also
affect
the
price
of
products
sold
and
materials
purchased
by
Toyota
in
foreign
currencies
through
transaction
risk.
In
particular,
strengthening
of
the
Japanese
yen against the U.S. dollar can have an adverse
effect on Toyota’s operating results.
Toyota
believes
that
its
use
of
certain
derivative
financial
instruments
including
foreign
exchange
forward
contracts
and
interest
rate
swaps
and
increased
localized
production
of
its
products
have
reduced,
but
not
eliminated,
the
effects
of
interest
rate
and
foreign
currency
exchange
rate
fluctuations.
Nonetheless,
a
negative
impact resulting
from
fluctuations
in
foreign
currency
exchange
rates and
changes
in interest
rates
may adversely
affect Toyota’s
financial
condition and
results
of operations.
For a
further discussion
of
currency and interest
rate
fluctuations
and
the
use
of
derivative
financial
instruments,
see
“Operating
and
Financial
Review
and
Prospects
Operating
Results
Overview
Currency
Fluctuations,”
“Quantitative
and
Qualitative
Disclosures
About
Market Risk,” and notes 19 and 20 to Toyota’s consolidated
financial statements.
High
prices
of
raw
materials
and
strong
pressure
on
Toyota’s
suppliers
could
negatively
impact
Toyota’s
profitability.
Increases
in
raw
materials
prices
that
Toyota
and
Toyota’s
suppliers
use
in
manufacturing
their
products
or
parts
and
components
such
as
steel,
precious
metals,
non-ferrous
alloys
including
aluminum,
and
plastic
parts,
4
may
lead
to
higher
production
costs
for
parts
and
components.
This
could,
in
turn,
negatively
impact
Toyota’s
future
profitability
because
Toyota
may
not
be
able
to
pass
all
those
costs
on
to
its
customers
or
require
its
suppliers
to
absorb
such
costs.
For
example,
Toyota
believes
that
increases
in
the
prices
of
raw
materials,
as
well
as
related
logistics
and
other
costs,
had
a
significant
negative
impact
on
its
results
for
fiscal
2022,
and
currently
expects that they will have a greater
negative impact on its results
for fiscal 2023.
A
downturn
in
the
financial
markets
could
adversely
affect
Toyota’s
ability
to
raise
capital.
Should
the
world
economy
suddenly
deteriorate,
a
number
of
financial
institutions
and
investors
will
face
difficulties
in
providing
capital
to
the
financial
markets
at
levels
corresponding
to
their
own
financial
capacity,
and, as
a
result,
there
is
a
risk
that
companies
may
not
be
able
to raise
capital
under
terms
that
they would
expect
to
receive
with
their
creditworthiness.
If
Toyota
is
unable
to
raise
the
necessary
capital
under
appropriate
conditions on a timely basis, Toyota’s
financial condition and results
of operations may be adversely
affected.
Regulatory,
Legal,
Political
and
Other
Risks
The
automotive
industry
is
subject
to
various
governmental
regulations
and
actions.
The
worldwide
automotive
industry
is
subject
to
various
laws
and
governmental
regulations
including
those
related to vehicle
safety and
environmental matters
such as emission
levels, fuel economy, noise and pollution.
In
particular,
automotive
manufacturers
such
as
Toyota
are
required
to
implement
safety
measures
such
as
recalls
for
vehicles
that
do
not
or
may
not
comply
with
the
safety
standards
of
laws
and
governmental
regulations.
In
addition,
Toyota
may,
in
order
to
reassure
its
customers
of
the
safety
of
Toyota’s
vehicles,
decide
to
voluntarily
implement recalls
or other
safety measures
even if the
vehicle complies
with the safety
standards of
relevant laws
and
governmental
regulations.
If
Toyota
launches
products
that
result
in
safety
measures
such
as
recalls
(including
where
parts
related
to
recalls
or
other
measures
were
procured
by
Toyota
from
a
third
party),
Toyota
may
incur
various
costs
including
significant
costs
for
free
repairs.
Many
governments
also
impose
tariffs
and
other trade
barriers,
taxes
and levies,
or enact
price
or
exchange controls.
Toyota
has
incurred
significant
costs
in
response
to
governmental
regulations
and
actions,
including
costs
relating
to
changes
in
global
trade
dynamics
and policies,
and
expects
to
incur
such
costs
in
the
future.
Furthermore,
new legislation
or
regulations
or
changes
in
existing
legislation
or
regulations
may
also
subject
Toyota
to
additional
costs
in
the
future.
If
Toyota
incurs
significant
costs
related
to
implementing
safety
measures
or
responding
to
laws,
regulations
and
governmental
actions, Toyota’s financial condition
and results of operations
may be adversely affected.
Toyota
may
become
subject
to
various
legal
proceedings.
As
an
automotive
manufacturer,
Toyota
may
become
subject
to
legal
proceedings
in
respect
of
various
issues,
including
issues
relating
to
the
topics
discussed
in
“—The
automotive
industry
is
subject
to
various
governmental
regulations
and
actions,”
as
well
as
product
liability
and
infringement
of
intellectual
property.
Toyota
may
also
be
subject
to
legal
proceedings
brought
by
its
shareholders
and
governmental
proceedings
and
investigations.
Toyota
is
in
fact
currently
subject
to
a
number
of
pending
legal
proceedings
and
government
investigations.
A
negative
outcome
in
one
or
more
of
these
pending
legal
proceedings
could
adversely
affect
Toyota’s
reputation,
brand
image,
financial
condition
and
results
of
operations.
For
a
further
discussion
of
governmental
regulations,
see
“Information
on
the
Company
Business
Overview
Governmental
Regulation,
Environmental
and
Safety
Standards”
and
for
legal
proceedings,
please
see
“Information
on
the
Company — Business Overview — Legal Proceedings.”
Toyota
may
be
adversely
affected
by
natural
calamities,
epidemics,
political
and
economic
instability,
fuel
shortages
or
interruptions
in
social
infrastructure,
wars,
terrorism
and
labor
strikes.
Toyota
is
subject
to
various
risks
associated
with
conducting
business
worldwide.
These
risks
include
natural
calamities;
epidemics;
political
and
economic
instability;
fuel
shortages;
interruption
in
social
5
infrastructure
including
energy
supply,
transportation
systems,
gas,
water,
or
communication
systems
resulting
from
natural
hazards
or
technological
hazards;
wars;
terrorism;
labor
strikes
and
work
stoppages.
Should
the
major
markets
in
which
Toyota
purchases
materials,
parts
and
components
and
supplies
for
the
manufacture
of
Toyota
products
or
in
which
Toyota’s
products
are
produced,
distributed
or
sold
be
affected
by
any
of
these
events, it may result in disruptions
and delays in the operations
of Toyota’s business.
Toyota
has
been,
and
is
expected
to
continue
to
be,
adversely
affected
by
the
spread
of
COVID-19.
The
global
spread
of
COVID-19
and
the
responses
to
it
by
governments
and
other
stakeholders
have
adversely
affected
Toyota
in
a
number
of
ways.
For
example,
for
reasons
such
as
government
directives
as
well
as
anticipated
reduced
demand
for
its
vehicles,
Toyota
has
temporarily
suspended,
or
intends
to
temporarily
suspend, production of
automobiles and components at selected
plants in Japan and overseas.
COVID-19 has also
affected, and is
expected to continue
to affect,
the businesses of Toyota dealers
and distributors, as well
as certain
of
Toyota’s
third-party
suppliers
and
business
partners.
In
addition,
the
global
spread
of
COVID-19
and
related
matters
have
adversely
affected
businesses
in
a
wide
variety
of
industries,
as
well
as
consumers,
all
of
which
negatively impacted demand for
Toyota’s vehicles and related financial
services.
The
duration
of
the
COVID-19
outbreak
and
the
resulting
future
effects
are
uncertain,
and
the
foregoing
impacts
and
other
effects
not
referenced
above,
as
well
as
the
ultimate
impact
of
the
COVID-19
outbreak,
are
difficult
to
predict.
The
impact
of
the
COVID-19
outbreak
and
the
resulting
future
effects
may
thus
adversely
affect Toyota’s financial condition
and results of operations
in later periods as well.
ITEM
4.
INFORMATION
ON
THE
COMPANY
4.A
HISTORY
AND
DEVELOPMENT
OF
THE
COMPANY
Toyota
Motor
Corporation
is
a
limited
liability,
joint-stock
company
incorporated
under
the
Commercial
Code
of
Japan
and
continues
to
exist
under
the
Companies
Act
of
Japan
(the
“Companies
Act”).
Toyota
commenced
operations
in
1933
as
the
automobile
division
of
Toyota
Industries
Corporation
(formerly
Toyoda
Automatic
Loom
Works,
Ltd.).
Toyota
became
a
separate
company
in
August
1937.
In
1982,
the
Toyota
Motor
Company
and
Toyota
Motor
Sales
merged
into
one
company,
the
Toyota
Motor
Corporation
of
today.
As
of
March
31,
2022,
Toyota
operated
through
559
consolidated
subsidiaries
(including
structured
entities)
and
169
associates and joint ventures
accounted for by the equity method.
See
“—
Business
Overview
Capital
Expenditures
and
Divestitures”
for
a
description
of
Toyota’s
principal
capital
expenditures
and
divestitures
between
April
1,
2020
and
March
31,
2022
and
information
concerning Toyota’s principal capital
expenditures and divestitures
currently in progress.
Toyota’s
principal
executive
offices
are
located
at
1
Toyota-cho,
Toyota
City,
Aichi
Prefecture
471-8571,
Japan. Toyota’s telephone number in Japan
is +81-565-28-2121.
The
SEC
maintains
a
website
(https://www.sec.gov/)
that
contains
reports,
proxy
and
information
statements,
and
other
information
regarding
issuers
that
file
electronically
with
the
SEC.
Toyota
also
maintains
a
website
(https://global.toyota/en/)
through
which
its
annual
reports
on
Form
20-F
and
certain
of
its
other
SEC
filings
may
be
accessed.
Information
contained
on
or
accessible
through
Toyota’s
website
is
not
part
of
this
annual report on Form 20-F.
4.B
BUSINESS
OVERVIEW
Toyota
primarily
conducts
business
in
the
automotive
industry.
Toyota
also
conducts
business
in
finance
and other industries.
Toyota sold
8,230 thousand vehicles
in fiscal 2022
on a consolidated
basis. Toyota had
sales
revenues
of
¥31,379.5
billion
and
net
income
attributable
to
Toyota
Motor
Corporation
of
¥2,874.6
billion
in
fiscal 2022.
6
Toyota’s
business
segments
are
automotive
operations,
financial
services
operations
and
all
other
operations.
The
following
table
sets
forth
Toyota’s
sales
to
external
customers
in
each
of
its
business
segments
for each of the past three fiscal
years.
Yen
in
millions
Year
Ended
March
31,
2020
2021
2022
Automotive
................................................
26,770,379
24,597,846
28,531,993
Financial Services
...........................................
2,172,854
2,137,195
2,306,079
All Other
..................................................
923,314
479,553
541,436
Toyota’s
automotive
operations
include
the
design,
manufacture,
assembly
and
sale
of
passenger
vehicles,
minivans
and
commercial
vehicles
such
as
trucks
and
related
parts
and
accessories.
Toyota’s
financial
services
business
consists
primarily
of
providing
financing
to
dealers
and
their
customers
for
the
purchase
or
lease
of
Toyota
vehicles.
Toyota’s
financial
services
business
also
provides
mainly
retail
installment
credit
and
leasing
through
the
purchase
of
installment
and
lease
contracts
originated
by
Toyota
dealers.
Related
to
Toyota’s
automotive
operations,
Toyota
is
working
towards
having
all
of
its
vehicles
become
connected
vehicles,
creating
new
value
and
reforming
businesses
by
utilizing
big
data
obtained
from
those
connected
vehicles,
and
establishing
new
mobility
services.
Toyota’s
all
other
operations
business
segment
includes
the
information
technology related businesses including
a web portal for automobile
information called GAZOO.com.
Toyota
sells
its
vehicles
in
approximately
200
countries
and
regions.
Toyota’s
primary
markets
for
its
automobiles are
Japan, North
America,
Europe and Asia.
The following table
sets forth
Toyota’s sales to
external
customers in each of its geographical
markets for each of the
past three fiscal years.
Yen
in
millions
Year
Ended
March
31,
2020
2021
2022
Japan
.....................................................
9,503,238
8,587,193
8,214,740
North America
..............................................
10,419,869
9,325,950
10,897,946
Europe
....................................................
3,133,227
2,968,289
3,692,214
Asia
......................................................
4,785,489
4,555,897
5,778,115
Other*
....................................................
2,024,724
1,777,266
2,796,493
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East.
During
fiscal
2022,
23.4%
of
Toyota’s
automobile
unit
sales
on
a
consolidated
basis
were
in
Japan,
29.1%
were
in
North
America,
12.4%
were
in
Europe
and
18.7%
were
in
Asia.
The
remaining
16.4%
of
consolidated
unit sales were in other markets.
The
Worldwide
Automotive
Market
Toyota estimates that annual worldwide
vehicle sales totaled approximately
83 million units
in 2021.
Automobile sales are affected
by a number of factors including:
social,
political and economic conditions;
introduction
of new vehicles and technologies;
costs incurred
by customers to purchase
and operate automobiles; and
the availability
of parts and components
that Toyota needs to manufacture
its products.
These
factors
can
cause
consumer
demand
to
vary
substantially
from
year
to
year
in
different
geographic
markets and in individual categories
of automobiles.
7
Global
economic
activity
headed
to
recovery
in
fiscal
2022
underpinned
by
each
country’s
fiscal
and
monetary
policies
as
well
as
the
gradual
relaxation
of
the
strict
restrictions
due
to
COVID-19.
The
automobile
market
faced
global
production
constraints
due
to
a lack
of
supply
of
parts
and
components
caused
by
the
impact
of COVID-19,
and also
the
tightening
of global
supply
of,
and increasing
demand
for, semiconductors.
However,
there
was
steady
demand
in
countries
such
as the
U.S., China
and
Japan,
resulting
in
a
recovery
compared
to
last
year.
In
the
short
term,
the
impact
of
geopolitical
tensions
that
arose
since
February
2022
spread
worldwide
in
the form of price increases
of products, making it even more
difficult to foresee the
future.
The
United
States
has
seen
sustained
economic
activity
due
to
progress
made
on
vaccinations
and
the
favorable
employment
and
wage
environment,
and
government
economic
policies
have
contributed
to
a
continued
recovery
based
on
strong
domestic
demand.
Monetary
policy
has
now
shifted
toward
interest
rates
increases
in
order
to
curb
overheating
inflation.
In
Europe,
while
progress
has
been
made
on
vaccinations,
there
is
once
again
an
increasing
number
of
COVID-19
cases,
which
has
led
to
restrictions
on
economic
activity.
Further,
Europe
has
been
the
most
affected
by
the
geopolitical
tensions
that
arose
beginning
in
February
2022,
which
has
blunted
the
momentum
of
recovery.
While
Japan
has
made
rapid
progress
on
vaccinations
since
the
middle
of 2021,
in
the
midst
of
cool-downs
and
resurgences
in
the
number of
COVID-19 cases,
the
economy
has
stagnated
due
to
policies
restricting
economic
activity,
as
well
as
reduced
production
activity
caused
by
supply
constraints.
In
China,
despite
government
support,
its
“zero-COVID”
policy
to
combat
a
resurgence
of
COVID-19
cases
has
severely
restricted
economic
activity
since
the
beginning
of
2022,
leading
to
a
sharp
deceleration
of
the
economy.
While
slower
than
developed
countries,
progress
with
vaccinations
in
emerging
economies
is
gradually
being
made,
and
infection
control
measures
are
being
eased,
leading
to
a
gradual
recovery;
however,
some
countries,
including
Brazil,
have
seen
a
slight
decrease
in
consumption
due
to
inflation
taking hold.
Amid
this
environment,
the
automobile
market
slightly
recovered
overall
in
2021
compared
to
the
previous
year
when
the
market
faced
a
sizable
drop
due
to
COVID-19,
but
it
continues
to
be
a
more
difficult
year
than
usual.
In
the
medium-
to
long-term,
Toyota
expects
the
automotive
market
to
continue
growing
driven
principally
by
growth
in
China
and
other
emerging
markets.
However,
global
competition
is
expected
to
be
severe,
as
the
pace
of
technological
advancement
and
development
of
new
products,
particularly
related
to
electrification,
quickens
further,
including
in
response
to
a
heightened
global
awareness
of
the
environment
with
a
view
to
carbon neutrality and the strengthening
of various standards in line
with such awareness.
In
2021,
China,
North
America,
Europe
and
Asia
were
the
world’s
largest
automotive
markets.
In
North
America,
new
vehicle
sales
were
approximately
17.86
million
units,
an
increase
from
the
previous
year.
In
Europe,
new
vehicle
sales
also
increased
from
the
previous
year
at
approximately
16.87
million
units.
In
Asia
(including
India
but
excluding
Japan
and
China),
new
vehicle
unit
sales
also
increased
from
the
previous
year
to
approximately
9.22
million
units.
The
share
of
each
market
across
the
globe,
which
Toyota
estimates
based
on
the
available
automobile
sales
data
in
each
country
and
region
information,
was
31%
for
China,
22%
for
North
America
(21%
excluding
Mexico
and
Puerto
Rico),
20%
for
Europe
and
11%
for
Asia.
In
China,
new
vehicle
sales increased from the previous
year to approximately 25.22 million
units.
The
worldwide
automotive
industry
is
affected
significantly
by
government
regulations
aimed
at
reducing
harmful
effects
on
the
environment,
enhancing
vehicle
safety
and
improving
fuel
economy.
These
regulations
have
added
to
the
cost
of
manufacturing
vehicles.
Many
governments
also
mandate
local
procurement
of
parts
and
components
and
impose
tariffs
and
other
trade
barriers,
as
well
as
price
or
exchange
controls
as
a
means
of
creating
jobs,
protecting
domestic
producers
or
influencing
their
balance
of
payments.
Changes
in
regulatory
requirements
and
other
government-imposed
restrictions
can
limit
or
otherwise
burden
an
automaker’s
operations.
Government
laws
and
regulations
can
also
make
it
difficult
to
repatriate
profits
to
an
automaker’s
home country.
8
The
development
of
the
worldwide
automotive
market
includes
the
continuing
globalization
of
automotive
operations.
Manufacturers
seek
to
achieve
globalization
by
localizing
the
design
and manufacture
of automobiles
and
their
parts
and
components
in
the
markets
in
which
they
are
sold.
By
expanding
production
capabilities
beyond their
home
markets,
automotive
manufacturers
are able
to reduce
their
exposure to
fluctuations
in foreign
exchange rates, as well as to trade
restrictions and tariffs.
Over
the
years,
there
have
been
many
global
business
alliances
and
investments
entered
into
between
manufacturers
in
the
global
automotive
industry.
There
are
various
reasons
behind
these
transactions
including
the
need
to
address
excessive
global
capacity
in
the
production
of
automobiles,
and
the
need
to
reduce
costs
and
improve
efficiency
by
increasing
the
number
of
automobiles
produced
using
common
vehicle
platforms
and
by
sharing
research
and
development
expenses
for
environmental
and
other
technology,
the
desire
to
expand
a
company’s
global
presence
through
increased
size;
and
the
desire
to
expand
into
particular
segments
or
geographic markets.
Toyota
believes
that
its
research
and
development
initiatives,
particularly
the
development
of
environmentally
friendly
new
vehicle
technologies,
vehicle
safety
and
information
technology,
provide
it
with
a
strategic advantage.
Toyota’s
ability
to
compete
in
the
global
automotive
industry
will
depend
in
part
on
Toyota’s
successful
implementation
of
its
business
strategy.
This
is
subject
to a
number
of factors,
some
of
which are
not
in
Toyota’s
control.
These
factors
are
discussed
in
“Operating
and
Financial
Review
and
Prospects”
and
elsewhere
in
this
annual report.
Toyota
Philosophy
The
automotive
industry
is
experiencing
a
once-in-a-century
transformation.
We
are
now
striving
to
transform
ourselves into
a
mobility
company.
In an
era
which it
is
hard to
predict
the
future, Toyota
has reflected
on the path it has taken thus far and
has formulated the “Toyota Philosophy” as
a roadmap for the future.
Toyota’s
mission
is
“Producing
Happiness
for
All”
by
expanding
the
possibilities
of
people,
companies
and
communities
through addressing
the
challenges
of
mobility
as a
mobility
company. In
order to
do so,
Toyota will
continue
to
create
new
and
unique
value
with
various
partners
by
relentlessly
committing
towards
monozukuri
(manufacturing), and by fostering
imagination for people and society.
T
oyoda
Principles
Partnerships
Software
The T
oyota W
ay
Va
l
u
e
Mission
Visi
on
Hardware
P
r
o
d
u
c
i
n
g
H
a
p
p
i
n
e
s
s
f
o
r
A
l
l
C
r
e
a
t
i
n
g
M
o
b
i
l
i
t
y
f
o
r
A
l
l
MISSION
Producing Happiness for All
Using our technology, we work towards a future of
convenience and happiness, available to
all
VISION
Creating Mobility for All
Toyota strives to raise the quality
and availability of
mobility so that individuals,
businesses, municipalities
and communities can do more, while achieving
a
sustainable relationship with
our planet
VALUE
We unite our three strengths (Software,
Hardware and
Partnerships) to create new and unique
value that
comes from the Toyota Way
9
Toyota
Production
System
(“TPS”)
TPS
is
imbued
with
the
desire
of
Sakichi
Toyoda,
the
founder
of
the
Toyota
family
of
companies,
and
Kiichiro Toyoda, the founder, “to make someone’s
work easier.”
TPS
was
established
based
on
two
concepts:
Jidoka,
which
can
be
loosely
translated
as
“automation
with
a
human
touch,”
an
idea
of
stopping
equipment
immediately
when
a
problem
occurs,
in
order
to
prevent
defective
products
from
being
produced
and
Just
in
Time
(“JIT”),
a
concept
based
on
the
idea
that
“each
process produces
only what
is needed
for the
next process
in a
continuous flow.”
Based on
the basic
philosophies
of
jidoka
and
JIT,
through
TPS,
Toyota
aims
to
efficiently
and
quickly
produce
vehicles
of
sound
quality,
one
at
a time, to fully satisfy
customer requirements.
Toyota
believes
that
improving
upon
TPS
is
essential
to
its
future
survival.
Currently,
TPS
is
being
introduced
into
development
departments
and
administrative
departments.
Toyota
intends
to
apply
TPS
to
its
development
departments
so
that
it
can
be
used
not
only
to
shorten
development
times
and
reduce
costs,
but
also
to develop our human resources, thus leading
to the manufacturing of ever-better
cars that customers
will love.
Selected
Initiatives
As
the
automotive
industry
faces
a
once-in-a-century
transformational
period
and
at
a
time
when
the
right
answers
are
elusive,
we
are
committed
to
“Producing
Happiness
for
All”
together
with
our
stakeholders,
underpinned
by
the
spirit
of
“For
the
Sake
of
Others”
which
we
have
maintained
since
our founding.
We
believe
management
practices
that
value
what
makes
us
Toyota
will
lead
to
sustained
efforts
to
achieve
the
aims
of
the
Sustainable
Development
Goals,
formally
adopted
by
the
United
Nations
in
September
2015
(the
“SDGs”),
to
“build a better world” while ensuring
that “no one will be left behind.”
We
are
accelerating
our
shift
toward
product-centered
management
under
the
“making
ever-better
cars”
initiative,
efforts
to
achieve
carbon
neutrality,
and
endeavors
to
develop
essential
technologies
such
as
software
and connected vehicles. The following details
the areas in which we particularly
wish to focus our efforts.
Product-centered
Management
We
have
historically
offered
a
wide
range
of
vehicles
aimed
at
meeting
customer
needs.
One
of
the
key
aspects
in our
car
making
is
sports
cars,
which
serves
as
the
front
line
for
passing
down the
skills
and
knowledge
that
will
be
passed
down
as
well
as
for
human
resource
development.
The
roots
of
our
motorsports
activities
can
be
traced
back
to
the
founder
Kiichiro
Toyoda’s
words,
“racing
is
indispensable
to
the
development
of
Japan’s
automobile
manufacturing
industry.”
We
have
created
sports
cars
that
bring
together
the
most
cutting-edge
technological prowess
of the
era, such as
the “Publica Sports,”
“Sports 800,” and
“2000GT” in the 1960s,
and the
“Supra,” “MR2,” “Celica,”
“Corolla
Levin,” and
“Sprinter
Trueno” in the
1980s. We
developed the
“LFA” in the
2010s,
which
is
the
cornerstone
of
our
vehicles
today.
The
“GR
Yaris”
is
our
attempt
to
flip
the
approach
of
making
race
cars
from
mass-production
cars
by
designing
a
race
car
from
the
ground
up.
From
the
initial
stages
of
development,
we
reached
out
to
professional
drivers
to
have
them
drive
the
car
for
repeated
cycles
of
evaluation and improvement. As a result,
the car evolved into one that
is fun to drive.
The
other
key
aspect
is
long-selling
products.
Our
long-selling
cars
have
been
beloved
by
customers
as
an
integral
part
of
their
lives,
and
must
continually
evolve
to
meet
the
needs
of
the
times.
The
“Vitz,”
as
it
was
known in
Japan, was
unified
under
the name
Yaris,
which had
taken
root
overseas, and
we
expanded its
lineup
to
include
the
“GR
Yaris”
and
“Yaris
Cross.”
Similarly,
the
“Corolla”
lineup
saw
the
addition
of
the
“Corolla
Sport”
and
“Corolla
Cross.”
We
will
promote
our
strategy
to
build
a
lineup
tailored
to
current
needs
while
leveraging the brand strength of
our long sellers.
In
order
to
practice
product-centered
management,
our
president,
President
Toyoda
has
driven
the
transformation
of
Toyota
since
taking
office,
based
on
the
three
pillars
to
make
ever-better
cars:
i)
TNGA
(Toyota
New
Global
Architecture),
which
facilitates
the
realization
of
excellent
performance
in
terms
of
10
fundamental
car
functions
moving,
turning,
and
stopping,
ii)
a
company
whose
people
are
always
passionate
about, and
have
a sense
of
responsibility
with respect
to,
the
full
product lineup
and
each and
every
car,
and iii)
a
master
driver
in
top
management
who
takes
final
responsibility
for
assessing
whether
the
cars
we
put
out
will
satisfy
our
customers.
We
will
continue
aiming
to
be
the
best
company
“in
town”
by
creating
better
cars
that
bring smiles to customers’
faces.
Initiatives
to
Achieve
Carbon
Neutrality
In
April
2021,
Toyota
announced
that
it
would
address
global-scale
challenges
to
achieve
carbon
neutrality
by 2050. To achieve carbon
neutrality,
Toyota intends to
continue implementing
electrified
vehicle strategies
that
contribute
to
reducing
CO
2
emissions
throughout
the
product
life
cycle
while
coordinating
with
national
governments
regarding
energy
policies,
including
renewable
energy
and
charging
infrastructure,
and
public
policies, including purchasing grants,
supplier support, and battery
recycling systems.
Since
launching
the
“Prius”
the
world’s
first
mass-production
hybrid
electric
vehicle
(“HEV”)
in
1997,
we
have
sold
a
cumulative
total
of
over
20
million
electrified
vehicles
worldwide,
achieving
a
CO
2
emissions
reduction
of
over
160
million
tons
according
to
our
estimates.
To
continue
accelerating
the
realization
of
carbon
neutrality,
we
will
respond
deftly
to
changes
in
customer
demand
trends
by
providing
a
diverse
set
of
product
options,
taking
into
consideration
region-specific
electric
power
conditions.
We
are
promoting
our
vehicle
electrification
strategy
from
all
directions,
including
battery
electric
vehicles
(“BEVs”),
HEVs,
plug-in
hybrid
electric
vehicles
(“PHEVs”),
and
fuel
cell
electric
vehicles
(“FCEVs”).
In
December
2021,
we
announced
our aim
of
developing
30
types
of
BEVs
and achieving
a
full
lineup
in
each
segment
globally
by 2030
to
achieve
global
sales
of
3.5
million
BEVs
per
year
by
2030.
We
also
announced
that
Toyota
plans
to
invest,
by
2030,
a
total
of
approximately
8
trillion
yen
in
capital
expenditures,
research
and
development
expenses
and
other
investments
relating
to
electrification.
Of
the
planned
8
trillion
yen,
approximately
4
trillion
yen
is
expected
to
relate
to
BEVs;
of
the
approximately
4
trillion
yen
towards
BEVs,
approximately
2
trillion
yen
is
planned
to
be
related
to
batteries.
Batteries
are
crucial
components
of
electrified
vehicles.
To
develop
batteries
that
our
customers
can
use with
peace
of
mind,
we focus
on
producing
batteries
that stand
out
for
five factors
and
strike
a
balance
among
them:
safety,
long
service
life,
high
quality,
quality
at
an
affordable
price,
and
outstanding
performance.
We
will
work
on
the
integrated
development
of
vehicles
and
batteries
to
reduce
costs.
We
are
also
making
use
of
our
internal
combustion
engine
technology.
The
hydrogen
engine,
which
draws
on
many
decades
of
tried
and
tested
technology,
has
the
potential
of
contributing
to
carbon
neutrality.
We
are
repeatedly
assessing
and
improving
the
hydrogen
engine-powered
Corolla
in
a
motorsports
environment,
where
development
takes
place
on
a
much
shorter
timeline
than it
does
for
mass-produced
automobiles.
In addition
to
developing
vehicles,
we need to
expand options
for creating,
distributing,
and using
energy. Through participation
in the
Super Taikyu
Series,
we
are
taking
on
this
challenge
together
with
many
comrades
gained
in
and
outside
of
the
auto
industry
with the will and passion for collaboration.
In the
production
field,
we
announced
that
we
aim
to achieve
carbon
neutrality
at
our
global plants
by
2035.
We
are
promoting
the
reduction
of
CO
2
emissions
through
the
introduction
of
renewable
energy
and
hydrogen
at
plants in addition to comprehensive
energy conservation.
For
a
further
discussion
of
Toyota’s initiatives,
see
“Automotive
Operations —
BEV Strategies,”
“Automotive
Operations — The Development and Supply of Batteries” and “Automotive Operations — Hydrogen Engine.”
Software
and
Connected
Initiatives
In
an
era
defined
by
“CASE,”
an
acronym
for
Connected,
Autonomous
/
Automated,
Shared,
and
Electric,
automobile
manufacturing
requires
technological
development
in
new
fields
such
as
electrification,
automated
driving, and
connectivity. We
aim to
provide
new value through
novel
experiences and
by bringing excitement
to
customers
through
the
mobility
of
“people,”
“goods,”
and
“things”
as
cars
become
more
linked
to
information.
We
believe
that
the
vehicle
development
platform
“Arene,”
which
is
currently
in
development
at
Woven
Alpha,
11
Inc.,
a
subsidiary
of
Toyota,
will
dramatically
transform
the
development
of
software
for
vehicles.
By
enabling
the
independent
development
of
software
apart
from
hardware,
Arene
leverages
the
strengths
of
hardware
cultivated
by
Toyota
to
achieve
the
development
of
safe,
high-quality,
and
advanced
software.
Furthermore,
application development on Arene is
also made easier, enabling users
to program applications more
efficiently.
The
proportion
of
a
car’s
value
attributable
to
software
is
growing.
By
developing
internally
the
portions
central
to
Toyota’s
future
to
enhance
our
competitiveness,
we
will
collaborate
with
our
partner
companies
to
accelerate
the
speed
of
mass
production.
Connected
cars
and
connected
technologies
will
be
applied
to
a
variety
of areas, and that which is to be connected
will expand to include people, cars, communities,
and society.
For
a
further
discussion
of
this
initiative,
see
“Automotive
Operations
Software
and
Connected
Initiatives.”
Commercial
Sector
Initiatives
CASE
technologies
can
only
contribute
to
society
once
they
become
widespread.
Commercial
vehicles
can
play
important
roles
in
CASE
technology
dissemination,
as
they
travel
long
distances
for
extended
periods
of
time to
support the
economy and
society and
can be
easily linked
with
infrastructure
development. In
April 2021,
Toyota,
Isuzu
Motors
Limited
(“Isuzu”)
and
Hino
Motors,
Ltd.
(“Hino”)
established
Commercial
Japan
Partnership
Technologies
(“CJPT”)
with
the
aim
to
accelerate
the
implementation
and
adoption
of
CASE
technologies
and
services
and
thereby
help
address
social
issues
and
contribute
to
the
realization
of
carbon
neutrality.
In
July
2021,
Suzuki
Motor
Corporation
(“Suzuki”)
and
Daihatsu
Motor
Co.,
Ltd.
(“Daihatsu”)
announced
that
they
had
joined
CJPT.
CJPT
plans
to
realize
its
aims
by
combining
the
commercial
vehicle
foundations
cultivated
by
Isuzu
and
Hino
and
the
strengths
of
Suzuki
and
Daihatsu
in
high-quality,
low-cost
manufacturing
with
Toyota’s
CASE
technologies.
CJPT
is
currently
60%
owned
by
Toyota,
with
Isuzu,
Hino,
Suzuki
and
Daihatsu
each
owning
10%.
CJPT
will
link
each
company’s
connected
technology
platforms
to
build
a
more
comprehensive
platform
for
commercial
vehicles
and
leverage
TPS
to
realize
JIT
logistics
and
increase
transport efficiency, thereby
helping to reduce CO
2
emissions.
For a further discussion of this
initiative, see “Automotive
Operations — Commercial Sector Initiatives.”
Woven
City
“Woven
City”
is
a
human-centered
city
where
we
aim
to
continuously
produce
new
value
and
business
models
by
utilizing
the
mobility
of
“information,”
“goods,”
and
“people”
to
support
daily
life,
by
rapidly
implementing
development
and demonstration
cycles
of
technologies
and services.
By
using
digital
twins,
which
involve
reproductions
of
future
products
and
technologies
in
a
digital
space
for
advancing
development
in
both
real
and
digital
forms,
we
are
simultaneously
testing
a
variety
of
options
virtually
before
building
the
real
versions.
Woven
City
will
be
a
constantly
improving,
ever-evolving
city
rooted
in
Toyota’s
kaizen
approach
thinking
that
there
is
always
a
better
way.
We
will
work
with
our
partners
in
this
quest
to
increase
the
significance
and
value
of
mobility,
which
is
not
only
about
moving
people
and
goods
but
also
about
moving
hearts.
For a further discussion of this
initiative, see “Automotive
Operations — Woven City.”
Dialogue
with
Employees
and
Human
Resource
Development
At
Toyota,
management
and
labor
unions
work
hand
in
hand
to
develop
the
economy
through
the
automobile
industry.
At
talks
held
in
March
2022,
we
deepened
our
mutual
understanding
on
topics
including
how
our
production
will
address
the
semiconductor
shortage,
the
reality
facing
our
suppliers
as
they
work
to
achieve
carbon
neutrality,
and
concerns
over
having
all
members
actively
participate
in
diversifying
workplaces,
using
a
forum
akin
to
a
management
meeting
but
with
full
participation.
To
survive
and
thrive
through
these
12
uncertain
times
as
we
head
into
uncharted
territory,
we
are
taking
action
amid
a
rapidly
changing
management
environment
based
on
the
belief
that
there
is
a
world
of
difference
between
where
we
might
end
up
simply
by
letting
things
run
their
course
for
the
next
decade
and
how
that
same
future
might
look
if
we
continue
striving
to
make things better.
To enhance the overall
potential of
our workforce, we
strive to develop
human resources
equipped with both
the
ability
to
act,
which
is
the
driving
force
of
our
business,
and
compassion,
or
the
ability
to
make
efforts
for
others,
such
as
customers
and
teammates,
and
to
learn
respectfully
from
others
and
keep
improving.
We
believe
we
can
learn
a
lot
from
athletes
who
lead
disciplined
lifestyles
focused
on
reaching
their
maximum
potential
in
the
instant
it
matters,
as
well
as
their
commitment
to
serving
others
through
contribution
to
their
own
team
and
training the next generation.
The
Toyota
group
will
keep
moving
forward
steadily
together
with
the
5.5
million
people
working
in
the
automotive
industry
in
Japan,
as
well
as
various
stakeholders
around
the
world,
in
order
to
become
a
mobility
company. We sincerely hope that our shareholders
will continue to extend
their patronage and support to us.
On
July
20,
2021,
Toyota
and
TOYOTA
Mobility
Tokyo
Inc.
(“TMT”),
a
wholly
owned
subsidiary,
announced
that,
during
certain
inspections
of
automobiles
performed
as
part
of
legally
required
maintenance
at
a
Lexus
dealership
in
Tokyo,
inspection
results
had
been
falsified
to
meet
the
standards
and
some
of
the
required
inspections
had
been
omitted.
Furthermore,
upon carrying
out
an
investigation
of
all
4,852
dealerships,
including
independent
dealerships,
selling
Toyota
and
Lexus
brand
vehicles
,
across
Japan,
it
was
discovered
that
such
misconduct
had
been
performed
at
multiple
locations.
There
are
various
issues
underlying
these
incidents,
including staff
shortages,
inadequate facilities,
misguided
attitudes
toward the
Japanese
system of regular,
legally
required
inspections
of
automobiles,
and
an
unforthcoming
corporate
culture.
Toyota
believes
one
of
the
root
causes
of
the
misconduct
is
that
it
failed
to
have
a
full
grasp
of
the
actual
conditions
at
dealership
worksites
and
their requests.
Toyota
and
all
of
its
dealerships
are
taking
the
series
of
incidents
extremely
seriously
and
placing
a
high
priority
on
properly
carrying
out
certain
inspections
of
automobiles
performed
as
part
of
legally
required
maintenance
operations.
We
will
make
concerted
efforts
to
regain
the
trust
of
customers
and
to
prevent
recurrence.
Furthermore,
on
March
4,
2022,
Hino
Motors,
Ltd.,
a
publicly
traded
Japanese
company
that
produces
and
sells
commercial
trucks
and
buses,
and
of
which
Toyota
owns
50.18%
of
the
voting
interests
as
of
March
31,
2022,
announced
that
it
has
identified
past
misconduct
in
relation
to
its
applications
for
certification
concerning
the
emissions
and
the
fuel
economy
performance
of
certain
of
its
engines
for
the
Japanese
market.
See
also
“—
Legal
Proceedings.”
Hino
announced
on
March
11,
2022
that
it
established
a
Special
Investigation
Committee
commissioned
with
developing
a
clearer
understanding
of
the
matter
and
analyzing
the
root
causes.
Hino
has
stated
that
the
Committee
will
propose
remedial
measures
concerning
engine
development
processes
and
best
practice
at
Hino.
Hino
has
announced
that
it
will
fully
cooperate
with
the
investigation
to
be
conducted
by the Special Investigation Committee,
and expressed its commitment
to taking effective
remedial measures.
The Toyota
group believes
compliance
is the
foundation of
management.
We will
work tirelessly
to
earn the
trust of customers and to prevent
recurrence.
Automotive
Operations
Toyota’s
sales
revenues
from
its
automotive
operations
were
¥28,605.7
billion
in
fiscal
2022,
¥24,651.5 billion in fiscal 2021, and ¥26,799.7 billion
in fiscal 2020.
Toyota
produces
and
sells
passenger
vehicles,
minivans
and
commercial
vehicles
such
as
trucks.
Toyota
Motor
Corporation’s
subsidiary,
Daihatsu,
produces
and
sells
mini-vehicles
and
compact
cars.
Hino,
also
a
subsidiary
of
Toyota
Motor
Corporation,
produces
and
sells
commercial
vehicles
such
as
trucks
and
buses.
Toyota also manufactures automotive
parts, components and accessories
for its own use and for sale to
others.
13
Vehicle
Models
and
Product
Development
Toyota’s
vehicles
(produced
by
Toyota,
Daihatsu
and
Hino)
can
be
classified
largely
into
electrified
vehicles
and
conventional
engine
vehicles.
Toyota’s
product
line-up
includes
subcompact
and
compact
cars,
mini-vehicles,
mid-size,
luxury,
sports
and
specialty
cars,
recreational
and
sport-utility
vehicles,
pickup
trucks,
minivans,
trucks
and
buses.
Toyota’s
luxury
cars
are
sold
in
North
America,
Europe,
Japan
and
other
regions,
primarily under the Lexus brand name.
In
fiscal
2020,
Toyota
introduced
a
new
Yaris
model
developed
with
the
aim
of
creating
a
car
with
high-
quality
ride
comfort
and
the
latest
safety
and
security
technologies,
while
taking
advantage
of
the
nimble
handling
of
a
compact
car.
In
addition,
we
commenced
sales
of
the
Raize,
which
caters
to
the
desires
of
customers who
want to
drive an
SUV and load their
cars with a
lot of luggage,
but also have
a car that
is compact
and
easy
to
drive.
In
addition,
we
launched
the
new
Highlander,
a
mid-size
SUV
suitable
for
city
driving
and
multi-passenger
use,
gradually
in
overseas
markets
starting
with
the
U.S.
In
the
Lexus
brand,
we
premiered
in
China
the
UX
300e,
which
pursues
refined,
pure,
exhilarating
performance
and
excellent
quietness
unique
to
Lexus
EVs,
while
maintaining
the
distinctive
design,
high
convenience
and
ease
of
handling
of
the
Lexus
UX
compact
crossover.
We
also
unveiled
the
GR
Yaris
a
sports
car
imbued
with
the
knowledge
and
know-how
to
make it an FIA World Rally Championship winner
– at the Tokyo Auto Salon 2020.
In fiscal
2021, despite
the suspension
of operations
at
factories
and the suspension
of business at
dealers due
to
the
impact
of
COVID-19,
Toyota
launched
various
new
models
as
planned.
The
new
Harrier,
an
SUV
for
the
new
era,
was
designed
to
resonate
with
the
heart
of
the
driver,
with
a
focus
on
sensory
quality
from
the
first
moment
of
seeing,
riding
and
driving
off
in
it,
rather
than
relying
on
utility
or
numerical
performance.
The
new
Mirai
featured
a
design
that
appeals
to
the
senses,
a
distinctive
driving
experience,
industry-leading
innovation,
and
cruising
range
that
gives
peace
of
mind
as
its
concept,
while
generating
zero
emissions,
and
will
serve
as
a
new departure
point
for
creating
a
hydrogen-based
society
of
the
future.
In
the
Lexus brand,
we
launched the
UX
300e,
which
offers
the
high-quality
driving
performance
and
excellent
quietness
unique to
Lexus BEVs,
the
high
reliability
and
convenience
of
the
electrification
technology
cultivated
in
the
manufacture
of
hybrid
models,
and
the
distinctive
design
and
high
functionality
of
the
Lexus
UX.
GR
Yaris
is
the
first
Toyota
vehicle
developed
with
the
reversed
concept
of
turning
a
motorsports
car
into
a
production
car.
The
car
was
evaluated
by
Master
Driver
Morizo
(the
racing
driver
name
for
Akio
Toyoda)
and
non-Toyota
professional
drivers
from
the
early
stages
of
development,
and
even
after
it
was
unveiled
at
the
Tokyo
Auto
Salon
2020,
it
underwent
repeated
cycles
of
evaluation
and
improvement
at
the
circuit
before
it
was
finally
launched.
As
a
result
of
our
efforts
to
further
streamline
costs
following
the
Lehman
Brothers
bankruptcy
and
the
“ever
better
cars
manufacturing”
initiative,
the
compact
car,
Yaris,
won
the
Car
of
the
Year
in
Europe,
a
place
where
people
have
continued
to
have
strong
passion
for
cars
in
its
long
automotive
history.
The
award
recognized
Yaris’s
fun-to-drive
features
and fuel efficiency as a HEV.
In
fiscal
2022,
Toyota
launched
the
first-ever
SUV
Corolla
model,
Corolla
Cross.
Since
the
launch
of
the
first-generation
in
1966,
the
Corolla
series
has
continued
to
evolve
and
embrace
new
challenges
and
has
sold
more
than
50
million
units
worldwide.
The
Noah
and
Voxy,
cars
supported
and
loved
by
many
customers,
including
families
among
others,
were
completely
redesigned
as
minivans
with
the
further
increased
ease
of
use
and
enhanced
advanced
fixtures.
In
pursuit
of
a
suite
of
features
designed
to
enable
customers
to
drive
their
vehicles
every
day
with
joy,
safety,
peace
of
mind,
and
comfort,
while
also
realizing
superior
environmental
performance,
Toyota
launched
the
HEV
Aqua,
which
is
the
world’s
first
vehicle
to
use
a
high-output
bipolar
nickel-hydrogen
battery
as
an
electric
drive
battery.
With
elevated
levels
of
driving
performance,
design,
and
advanced
technology,
the
all-new
NX,
which
is
the
first
model
to
introduce
the
next
generation
of
Lexus,
accelerates
the
proliferation
of
electrified
models
by
being
Lexus’
first-ever
PHEV
also
offered
as
a
HEV.
In
addition, the new Toyota
bZ series of
BEVs that are easy
to use and
highly appealing, and
the introduction
of this
series
is
a
part
of
Toyota’s
efforts
to
reduce
CO
2
emissions.
Toyota
launched
the
bZ4X, the
first
of
the
bZ
series,
which
offers,
in
addition
to
a
comfortable
cabin,
a
new
lifestyle
and
the
opportunity
to
spend
precious
time
with
family
and
friends
as
well
as
the
BEV’s
unique
joy
of
driving.
For
motorsports
cars,
Toyota
developed
the
14
GRMN
Yaris
as
“embodiments
of
making
ever-better
motorsports-bred
cars.”
Toyota
will
further
evolve
its
concept of “making ever-better
cars” to meet customers’
needs in countries and regions worldwide.
Markets,
Sales
and
Competition
Toyota’s
primary
markets
are
Japan,
North
America,
Europe
and
Asia.
The
following
table
sets
forth
Toyota’s
consolidated
vehicle
unit
sales
by
geographic
market
for
the
periods
shown.
The
vehicle
unit
sales
below
reflect
vehicle
sales
made
by
Toyota
to
unconsolidated
entities
(recognized
as
sales
under
Toyota’s
revenue recognition
policy),
including sales
to unconsolidated
distributors
and dealers.
Vehicles sold
by Daihatsu
and Hino are included in the vehicle unit
sales figures set forth
below.
Year
Ended
March
31,
2020
2021
2022
Market
Units
%
Units
%
Units
%
Japan
..............................
2,239,549
25.0%
2,125,121
27.8%
1,924,185
23.4%
North America
.......................
2,713,165
30.3
2,312,799
30.3
2,393,912
29.1
Europe
.............................
1,029,249
11.5
959,363
12.5
1,017,099
12.4
Asia
...............................
1,600,341
17.9
1,222,073
16.0
1,542,918
18.7
Other*
.............................
1,372,392
15.3
1,026,749
13.4
1,352,311
16.4
Total
..................................
8,954,696
100.0%
7,646,105
100.0%
8,230,425
100.0%
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East, etc.
The following
table
sets
forth Toyota’s
vehicle
unit
sales and
market
share in
Japan, North
America, Europe
and
Asia
on
a
retail
basis
for
the
periods
shown.
Each
market’s
total
sales
and
Toyota’s
sales
represent
new
vehicle
registrations
in
the
relevant
year
(except
for
the
Asia
market
where
vehicle
registration
does
not
necessarily
apply).
All
information
on
Japan
excludes
mini-vehicles.
The
sales
information
contained
below
excludes unit
sales
by
Daihatsu and
Hino, each
a consolidated
subsidiary
of Toyota.
Vehicle unit
sales in
Asia do
not include sales in China.
Thousands
of
Units
Year
Ended
March
31,
2020
2021
2022
Japan
:
Total market sales (excluding
mini-vehicles)
............
3,185
2,901
2,664
Toyota sales (retail basis,
excluding mini-vehicles)
.......
1,553
1,505
1,361
Toyota market share
...............................
48.8%
51.9%
51.1%
Thousands
of
Units
Year
Ended
December
31,
2019
2020
2021
North
America
:
Total market sales
.................................
20,379
17,157
17,861
Toyota sales (retail basis)
...........................
2,757
2,408
2,681
Toyota market share
...............................
13.5%
14.0%
15.0%
Europe
:
Total market sales
.................................
20,751
16,638
16,870
Toyota sales (retail basis)
...........................
1,089
993
1,076
Toyota market share
...............................
5.3%
6.0%
6.4%
Asia
(excluding
China)
:
Total market sales
.................................
9,726
8,181
9,224
Toyota sales (retail basis)
...........................
1,347
969
1,189
Toyota market share
...............................
13.8%
11.8%
12.9%
15
Japan
Japan
is
one
of
the
leading
countries
with
respect
to
technological
advancements
and
improvements
in
the
automotive
industry
and
will
continue
to
demonstrate
such
strength.
Toyota
strives
to
earn
customer
satisfaction
by
introducing
products
distinctive
of
Japan’s
manufacturing
ability
such
as
value-added
products
including
Lexus
models,
FCEVs,
PHEVs
and
HEVs,
vehicles
with
three-seat
rows
and
mini-vehicles.
Toyota’s
consolidated
vehicle
sales
in
Japan
in
fiscal
2022
was
1,924
thousand
units,
90.5%
of
that
of
the
previous
fiscal
year.
Toyota
endeavors
to
secure
and
maintain
its
significant
share
of
and
position
atop,
the
Japanese
market.
Toyota
held
a
domestic
market
share
(excluding
mini-vehicles)
on
a
retail
basis
of
48.8%
in
fiscal
2020,
51.9%
in fiscal 2021 and 51.1% in fiscal
2022.
Although
Toyota’s
principle
is
to
conduct
production
in
regions
where
it
enjoys
true
competitiveness,
it
considers Japan to
be the source
of its good manufacturing
practices.
Having 16 production sites
in Japan, Toyota
supports
its
operations
worldwide
through
measures
such
as
the
development
of
new
technologies
and
products,
low-volume
vehicles
to
complement
local
production,
production
of
global
vehicle
models
which
straddle
multiple regions and supporting
overseas factories.
North
America
The
North
American
region
is
one
of
Toyota’s
most
significant
markets.
In
the
region,
Toyota
has
in
recent
years reorganized its production
structure and made improvements
to its product lineup.
In
the
North
American
region,
Toyota
has
a
wide
product
lineup
in
every
segment
(excluding
large
trucks
and buses).
Toyota
sold 2,394
thousand
vehicles in
the region
on a
consolidated
basis in
fiscal 2022,
representing
approximately
29%
of
Toyota’s
total
unit
sales
on
a
consolidated
basis.
The
United
States,
in
particular,
is
the
largest
market
in
the
North
American
region,
accounting
for
87%
of
Toyota’s
retail
sales
in
the
region.
Sales
figures for fiscal 2022 were 103.5%
of that of the prior fiscal
year.
Toyota’s North American
production capacities
include the
production of vehicle
models such
as the RAV4,
Camry, Tacoma and Highlander through 13 manufacturing
entities.
In
November
2021,
Toyota
created
Toyota
Battery
Manufacturing,
North
Carolina
(“TBMNC”)
as
the
first
plant
to
produce
automotive
batteries
for
Toyota
in
North
America.
When
it
comes
online
in
2025,
it
is
expected
that TBMNC will
have four
production
lines, each
capable of delivering
enough lithium-ion
batteries
for 200,000
vehicles
with
the
intention
to
expand
to
at
least
six
production
lines
for
a
combined
total
of
up
to
1.2
million
vehicles per year.
Toyota
has
five
research
and
development
centers
in
North
America.
As
for
vehicle
development,
the
Toyota
Technical
Center
spearheads
the
design,
planning,
and
evaluation
of
vehicles
and
parts
as
to
their
ability
to meet customer needs.
Europe
Toyota’s
principal
European
markets
are
Germany,
France, the
United
Kingdom, Italy,
Spain
and
Russia. In
the
European
markets,
as
a
full-lineup
car
manufacturer,
Toyota
aims
to
increase
its
global
vehicle
sales
with
a
focus
on
electrified
vehicles
(HEVs,
PHEVs,
FCEVs
and
BEVs)
that
suit
the
needs
of
customers
and
the
circumstances
of
each
region.
Toyota
sold
1,017
thousand
vehicles
on
a
consolidated
basis
in
the
region
in
fiscal
2022, 106.0% of that of the prior fiscal
year.
In
terms
of
production,
to
strengthen
its
business
setup
so
that
it
is
less
likely
to
be
affected
by
exchange
rates,
Toyota
produces
models
such
as
the
Corolla,
Yaris
and
C-HR
locally
through
seven
entities
in
Europe.
In
addition, Toyota is
actively promoting production
and sales measures that meet
local demand by strengthening its
value chain including used car dealerships,
after-sales services
and finance and insurance services.
16
Asia
Toyota’s
principal
Asian
markets
are
Thailand,
India,
Indonesia
and
Taiwan.
Toyota
sold
1,543
thousand
vehicles
on
a
consolidated
basis
in
the
region
in
fiscal
2022
(including
China),
126.3%
of
that
of
the
prior
fiscal
year.
In light
of
the importance
of
the
Asian market
that
is
further
expected
to grow
in the
long term,
Toyota aims
to
build
an
operational
framework
that
is
efficient
and
self-reliant,
as
well
as
a
predominant
position
in
the
automotive
market
in
Asia.
Toyota
has
responded
to
increasing
competition
in
Asia
by
making
strategic
investments
in
the
market
and
developing
relationships
with
local
suppliers.
Toyota
believes
that
its
existing
local
presence in
the
market
provides
it with
an
advantage over
new
entrants
to the
market
and
expects to
be
able
to promptly respond to demand for vehicles
in the region.
In
terms
of
production,
Toyota
manufactures
models
such
as
the
Hilux,
Hiace,
Corolla,
Camry
and
Vios
through
16
entities.
Toyota’s
plants
in
Thailand,
not
only
to
meet
domestic
demand
but
also
to
serve
as
a
production base for locations inside
and outside of the ASEAN region.
China
Toyota
has
been
conducting
operations
in
China
in
large
part
through
joint
ventures,
and
its
success
in
producing
products
that
meet
local
demands
and
in
establishing
its
sales
and
service
network
has
significantly
contributed
to
Toyota’s
profits.
Based
on
the
firm
business
foundation
that
it
has
established,
Toyota
is
conducting
its
operations
with
the
aim
of
promoting
further
growth
and
increasing
profitability
through
further
development of its sales and service
network and expansion of its product
lineup.
In
terms
of
production,
Toyota
has
been
conducting
a
significant
portion
of
its
China
business,
including
in
relation
to
the
production
and
sales
of
vehicles,
through
joint
ventures.
Toyota
has
two
major
joint
venture
partners
in
China,
namely,
China
FAW
Group
Corporation
and
Guangzhou
Automobile
Group
Co.,
Ltd.
The
joint
venture
with
China
FAW
Group
manufactures
models
such
as
the
Corolla,
Vios
and
RAV4,
and
the
joint
venture
with
Guangzhou
Automobile
Group
Co.,
Ltd.
manufactures
models
such
as
the
Camry,
Yaris
and
Highlander.
Total
vehicle
sales
in
the
Chinese
market
were
25.17
million
vehicles
in
2021,
approximately
the
same
as
the
25.21
million
vehicles
in
2020.
In
this
market,
Toyota’s
sales
in
2021
were
1.94
million
vehicles,
107.8%
of
that
of
the
previous
year.
In
the
domestically
produced
passenger
vehicle
market
in
mainland
China
(20.78 million
vehicles), Toyota
had a market
share of 9.3%.
Toyota has been expanding
the distribution
network
for
locally
produced
vehicles
in
cooperation
with
China
FAW
Group
and
Guangzhou
Automobile
Group
under
the
names
Tianjin
FAW
Toyota
Motor
Co.,
Ltd.
and
Guanqi
Toyota
Motor
Co.,
Ltd.,
respectively,
and
for
imported
vehicles,
Toyota
has
also
been
expanding
primarily
the
Lexus
brand
sales
network.
Toyota
plans
to
further
increase
sales
by
expanding
the
number
of
dealers
and
its
product
lineup.
In
addition,
as
the
market
in
China
develops
and
becomes
more
sophisticated,
Toyota
plans
to
promote
so-called
“Value
Chain”
businesses,
such
as
used
car
sales,
services,
financing
and
insurance,
so
as
to
contribute
to
the
development
of
a
mobility
society.
South
and
Central
America,
Oceania,
Africa
and
the
Middle
East
Toyota’s
consolidated
vehicle
sales
in
South
and
Central
America,
Oceania,
Africa
and
the
Middle
East
(collectively,
the
“Four
Regions”)
in
fiscal
2022
were
1,352
thousand
units,
131.7%
of
that
of
the
prior
fiscal
year.
Toyota’s
principal
markets
in
the
Four
Regions
are
Brazil
and
Argentina
in
South
and
Central
America,
Australia
in
Oceania,
South
Africa
in
Africa
and
Saudi
Arabia
in
the
Middle
East.
The
core
models
in
the
Four
Regions are global models such as the Corolla,
IMV (the Hilux) and Camry.
17
Toyota
has
seven
production
bases
in
the
Four
Regions.
In
these
regions,
which
are
expected
to
become
increasingly
important
to
Toyota’s
business
strategy,
Toyota
aims
to
continue
developing
new
products
which
meet the specific demands of
each region, increasing production
and promoting sales.
Production
Toyota
and
its
affiliated
companies
produce
automobiles
and
related
components
through
more
than
50
overseas
manufacturing
organizations
in
27
countries
and
regions
aside
from
Japan.
Facilities
are
located
principally
in
Japan,
the
United
States,
Canada,
the
United
Kingdom,
France,
Turkey,
Czech
Republic,
Russia,
Poland,
Thailand,
China,
Taiwan,
India,
Indonesia,
South
Africa,
Argentina
and
Brazil.
See
“Information
on
the
Company — Property, Plants and Equipment” for a
description of Toyota’s principal
production facilities.
In
promoting
a
sustainable
growth
strategy,
establishing
a
system
capable
of
providing
optimal
supply
of
products in the global market is
integral to Toyota’s strategy.
In
line
with
its
basic
policy
of
manufacturing
in
countries
or
regions
where
there
is
demand
and
where
Toyota
is
truly
competitive,
Toyota
will
make
efficient
use
of
and
maximize
capacity
utilization
at
its
existing
plants
to
respond
to
the
expanding
market
and
will
continue
to
focus
on
making
efficient
capital
investments
as
necessary.
Furthermore,
Toyota
will
continue
to
place
top
priority
on
safety
and
quality
in
strengthening
true
competitiveness with the aim
of achieving sustainable growth.
The
following
table
shows
Toyota’s
worldwide
vehicle
unit
production
by
geographic
market
for
the
periods
shown.
These
production
figures
do
not
include
vehicles
produced
by
Toyota’s
unconsolidated
affiliated
companies.
The sales
unit
information
elsewhere
in this
annual
report
includes
sales of
vehicle
units
produced
by
these
affiliated
companies.
Vehicle
units
produced
by
Daihatsu
and
Hino
are
included
in
the
vehicle
unit
production figures set forth
below.
Year
Ended
March
31,
2020
2021
2022
Japan
........................................................
4,413,162
3,948,385
3,738,321
North America
.................................................
1,807,289
1,641,830
1,751,915
Europe
.......................................................
674,125
641,830
706,732
Asia
.........................................................
1,521,551
1,014,968
1,498,557
Other*
.......................................................
403,495
305,883
462,698
Total
........................................................
8,819,622
7,552,896
8,158,223
*
“Other” consists of Central
and South America and Africa.
Toyota
closely
monitors
its
actual
units
of
sale,
market
share
and
units
of
production
data
and
uses
this
information to allocate
resources to existing manufacturing
facilities and to
plan for future expansions.
See
“—
Capital
Expenditures
and
Divestitures”
for
a
description
of
Toyota’s
recent
investments
in
completed
plant
constructions
and
for
a
description
of
Toyota’s
current
investments
in
ongoing
plant
constructions.
Distribution
Toyota’s
automotive
sales
distribution
network
is
the
largest
in
Japan.
As
of
March
31,
2022,
this
network
consisted
of
256
dealers
employing
approximately
110
thousand
personnel
and
operating
approximately
4.6 thousand sales
and service outlets.
TOYOTA Mobility Tokyo Inc. is the only dealer owned by Toyota and the
rest are independent.
18
Toyota
believes
that
this
extensive
sales network
of
independent
local
interests
has been
an
important
factor
in
its
success
in
the
Japanese
market.
A
large
number
of
the
cars
sold
in
Japan
are
purchased
from
salespersons
who
visit
customers
in
their
homes
or
offices.
In
recent
years,
however,
the
traditional
method
of
sales
through
home
visits
is
being
replaced
by
showroom
sales,
and
the
percentage
of
automobile
purchases
through
showrooms has
been gradually
increasing. Toyota
expects this trend
to continue
even after the
COVID-19 related
crisis,
and
accordingly
is
working
to
improve
its
sales
activities
such
as
customer
reception
and
meticulous
service at showrooms, as well as online
sales, to increase customer
satisfaction.
Sales of
Toyota vehicles in
Japan had been conducted
through four
sales channels until
April 2020, but
from
May 2020
shifted
to
a
framework
where
all
of
its
Japanese-market
vehicle
models
are
made
available
through
all
sales outlets in
Japan. In addition, Toyota introduced the
Lexus brand to the Japanese market in
August 2005, and
currently distributes
the Lexus brand
vehicles through a network of 181 new-vehicle
sales outlets dedicated
to the
Lexus
brand
in
order
to
enhance
its
competitiveness
in
the
domestic
luxury
automotive
market.
The
following
table provides information
on the dealer network as of March 31, 2022.
Dealers
Channel
Toyota
Owned
Independent
Outlets
Toyota brand
.............................
1
company
255 companies
4,482 outlets
Lexus brand
..............................
2
2
outlets
159 outlets
181 outlets
Outside
Japan,
Toyota
vehicles
are
sold
through
approximately
168
distributors
in
approximately
204
countries
and
regions.
Through
these
distributors,
Toyota
maintains
networks
of
dealers.
The
chart
below
shows the number of Toyota distributors
as of March 31, 2022 by country and region:
Country/Region
Number
of
Countries
Number
of
Distributors
North America
............................................
3
5
Europe
..................................................
5
3
2
9
China
...................................................
1
4
Asia (excluding China)
.....................................
1
9
1
3
Oceania
.................................................
1
7
1
5
Middle East
..............................................
1
6
1
4
Africa.
..................................................
5
6
4
8
Central and South America
..................................
3
9
4
0
BEV
Strategies
On
December
14,
2021,
Toyota
held
a
briefing
on
its
BEV
strategy
where
it
announced
that
it
would
be
boosting its
plans for
BEV sales
in 2030
from 2
million to
3.5 million
units, and that
Lexus was aiming
for BEVs
to account
for
100
percent
of
its
sales
in
Europe,
North
America,
and China
by the
same
year,
followed by
BEVs
accounting for 100 percent of its
sales globally starting in 2035.
Toyota
believes
that
achieving
carbon
neutrality
means
realizing
a
world
in
which
all
people
living
on
this
planet
continue
to
live
happily.
We
want
to
help
realize
such
a
world.
This
has
been
and
will
continue
to
be
Toyota’s
wish
and
our
mission
as
a
global
company.
For
that
challenge,
we
need
to
reduce
CO
2
emissions
as
much as possible, as soon as possible.
Energy
plays
a
critical
role
in
achieving
carbon
neutrality.
At
present,
the
energy
situation
varies
greatly
from region to
region. That is exactly why Toyota is
committed to providing a diversified
range of carbon-neutral
options
to
meet
whatever
the
needs
and
situations
might
be
in
every
country
and
region.
In
this
diversified
and
uncharted
era,
it
is
important
to
flexibly
change
the
type and
quantity
of
products
produced
while
keeping
an
eye
on market
trends.
We
believe that
the
reduction
in lead
times
and
high-mix,
low-volume
production methods
that
we have cultivated
through the TPS, along
with the steady
efforts of
Japanese manufacturing,
will enable us
to be
competitive going forward.
19
In
terms
of
vehicle
production,
we
believe
that
all
electrified
vehicles
can
be
divided
into
two
categories,
depending
on
the
energy
that
they
use.
One
category
is
that
of
“carbon-reducing
vehicles.”
If
the
energy
that
powers vehicles
is not
clean, the
use of
an electrified
vehicle,
no matter
what type
it
might be, would not
result in
zero
CO
2
emissions.
The
other
category
is
that
of
“carbon-neutral
vehicles.”
Vehicles
in
this
category
run
on
clean
energy
and
achieve
zero
CO
2
emissions
in
the
whole
process
of
their
use.
We
at
Toyota
will
strive
to
realize such vehicles.
The
Toyota
brand
now
offers
more
than
100
models
of
engine-only
vehicles,
HEVs,
PHEVs,
and
FCEVs
in
more
than
170
countries
and
regions.
The
Lexus
brand
has
introduced
more
than
30
models
of
engine-only
vehicles,
HEVs,
and
PHEVs
in
more
than
90
countries
and
regions.
Furthermore,
we plan
to
expand
the
options
for carbon
neutral
vehicles by
offering
a full
lineup
of
BEVs. Specifically,
we
plan
to roll
out
30 BEV
models
by
2030, offering a full lineup of BEVs globally
in both the passenger and commercial
vehicle segments.
The
Development
and
Supply
of
Batteries
While promoting a
full lineup
of electrified
vehicles, we have
also been developing and manufacturing
a full
lineup
of
batteries.
These
development
efforts
are
organized
by
type
of
electrified
vehicle.
For
HEVs,
our
focus
is on power
output, or
in other
words, instantaneous
power,
while, when
it comes
to PHEVs and
BEVs, our focus
is on capacity or what can be called “endurance.”
In
the
area
of
batteries,
Toyota
has
continued
to
research,
develop,
and
produce
batteries
in-house
for
many
years.
In
1996,
we
established
what
is
today
Prime
Earth
EV
Energy
Co.,
Ltd.
While
refining
our
technologies
related to nickel-metal
hydride batteries, we started
accelerating the development
of lithium-ion batteries
in 2003.
Furthermore,
since
establishing
our
Battery
Research
Division
in
2008,
we
have
been
advancing
research
on
solid-state
batteries
and
other
next-generation
batteries.
In
2020,
we
established
Prime
Planet
Energy
&
Solutions,
Inc.
to
accelerate
integrated
efforts
in
the
battery
business.
Over
the
past
26
years,
Toyota
has
made
nearly
1
trillion
yen
in
capital
expenditures,
research
and
development
expenses
and
other
investments
to
produce
more
than
20
million
batteries.
We
believe
that
our
accumulated
experience
is
an
asset
that
gives
us
a
competitive edge.
Going forward,
we intend to
make a total
of 2 trillion
yen in new
capital expenditures,
research
and
development
expenses
and
other
investments
relating
to
batteries,
with
the
aim
of
realizing
even
more-
advanced, high-quality, and affordable
batteries.
As
for
batteries
for
HEVs,
we
have
been
continuously
upgrading
nickel-metal
hydride
batteries
and
lithium-ion
batteries,
taking
advantage
of
their
respective
characteristics.
In
particular,
we
took
on
the
challenge
of
developing
a
bipolar
structure
in
the
course
of
creating
a
nickel-metal
hydride
battery
to
be
installed
in
the
Aqua,
which
underwent
a
full-scale
redesign
completed
in
July
2021,
and
have
become
the
first
in
the
world
to
commercialize
a
battery
of
this
kind
as
an
onboard
battery
for
driving.
Compared
to
the
batteries
used
in
the
previous
generation
of
the
Aqua,
the
output
density
has
been
doubled,
giving
the
car
a
powerful
acceleration
sensation.
We
are
currently
engaged
in
development
aimed
at
creating
more-advanced
lithium-ion
batteries
by
the second half of the 2020s.
To
develop
batteries
that
our
customers
can
use
with
peace
of
mind,
we
focus
on
producing
batteries
that
balances
five
factors,
which
stand
out
for
their
“safety,”
have
“long
service
life,”
boast
“high-level
quality,”
and
are
“good
yet
affordable”
as
well
as
capable
of
“outstanding
performance.”
For
example,
a
longer
service
life
affects
a
vehicle’s
residual
value.
In
terms
of
cruising
range,
high
energy
density
and
high-level
performance
are
also
necessary.
On
the
other
hand,
over-emphasis
on
a
fast
charging
speed
may
increase
the
danger
of
overheating
or
even
fire
and
thus
decrease
battery
safety.
This
concept
has
remained
unchanged
since
batteries
were
installed
in
the
first-generation
Prius,
and
it
applied
to
all
the
batteries
in
all
of
our
electrified
vehicles.
Although
Toyota
is
committed
to
balancing
the
five
factors,
too
much
emphasis
on
one
could
be
detrimental
to
the
others.
That
is
why
we
believe
that
the
integrated
development
of
batteries
and
vehicles
is
essential.
How
batteries
are
used
depends
on
how
the
vehicles
in
which
they
are
installed
are
used.
For
example,
the
environments
in
which
vehicles
are
operated
differ
according
to
each
vehicle’s
mode
of
use
for
example,
if
it
20
is
being
used
as
a
taxi
or
for
commuting
as
well
as
geographic
location,
and
these
factors
will
affect
such
conditions
as
charging
frequency
and
battery
temperature.
Accordingly,
we
carry
out
mock
driving
tests
that
assume
a
diverse
range
of
vehicle
usage
in
order
to
obtain
data
on
actual
usage
environments
and
provide
feedback
to
inform
the
evaluation
and
design
of
batteries.
To
determine
the
balancing
point
of
the
five
factors
discussed
above,
it
is
necessary
to
obtain
driving
data
that
includes
driving
conditions
and
usage
environments,
find out
what
the conditions
would
be like
if
batteries
were used
instead, and
repeatedly
verify what
is happening
inside
the
batteries.
Such
steady
and
earnest
efforts
for
both
batteries
and
vehicles
are
the
secret
behind
Toyota’s
advantages.
To
popularize
BEVs,
we
strive
to
reduce
costs
via
the
integrated
development
of
vehicles
and
batteries
to
provide
BEVs
at
a
reasonable
price.
To
start
with,
we
aim
to
reduce
the
costs
of
batteries
themselves
by
30%
or
more
by
developing
materials
and
structures.
Then,
for
the
vehicle,
we
aim
to
improve
power
consumption,
which
is
an
indicator
of
the
amount
of
electricity
used
per
unit
of
distance,
by
30%,
starting
with
the
Toyota
bZ4X.
Improved
power
efficiency
leads
to
reduced
requirements
for
battery
capacity,
which
will
result
in
a
cost
reduction.
Through
this
integrated
development
of
vehicles
and
batteries,
we
aim
to
reduce
the
battery
cost
per
vehicle by 50% compared to the Toyota bZ4X in the
second half of the 2020s.
In
the
near
future,
the
energy
density
of
conventional
lithium-ion
batteries
per
unit
of
weight
is
expected
to
see
its
peak.
Accordingly,
vigorous
efforts
are
now
under
way
to
develop
next-generation
lithium-ion
batteries,
aiming
to
achieve
longer
service
life,
greater
energy
density,
more
compact
size,
and
lower
costs.
At
Toyota,
we
push
ahead
with
the
development
of
such
batteries
by
employing
the
following
three
approaches.
For
liquid
batteries,
which
use
liquid
electrolyte,
we
are
taking
on
the
challenge
of
realizing
“material
evolution”
and
“structural
innovation.”
At
the
same
time,
we
are
aiming
to
commercialize
all-solid-state
batteries
that
employ
solid
electrolyte
instead
of
liquid
electrolyte.
As
such,
our
wide-ranging
development
efforts
are
aimed
at
creating
three
types
of
batteries,
and
by
the
second
half
of
the
2020s,
we
hope
to
improve
the
characteristics
of
each
type
so
that
we
can
provide
batteries
that
can
be
used
with
peace
of
mind.
With
regard
to
all-solid-state
batteries,
we
promote
development
aimed
at
achieving
higher
output,
longer
cruising range,
and
shorter
charging
times.
In
June
2020,
we
built
a
vehicle
equipped
with
all-solid-state
batteries
and
conducted
test
runs
on
a
test
course
to
obtain
driving
data.
Based
on
that
data,
we
continued
to
make
improvements,
and
in
August
2020,
we
obtained license
plate registration
for
vehicles equipped
with all-solid-state
batteries and
conducted test
drives. In
the
course
of
the
development
process,
we
discovered
that
the
fast
movement
of
ions
within
all-solid-state
batteries
could
possibly
enable
them
to
achieve
higher
output.
On
the
other
hand,
it
was
revealed
that
these
batteries
tend
to
deteriorate
faster
due
to
the
formation
of
gaps
within
the
solid
electrolyte,
posing
an
issue
of
shorter
service
life.
Therefore,
we
need
to
continue
development,
mainly
of
solid
electrolyte
materials.
We
plan
to
start
the
introduction
of
all-solid-state
batteries
with
those
for
HEVs
as
these
vehicles
require
high
output.
We
have also
accumulated
a wealth
of
know-how
regarding
HEVs.
We intend
to
release
these
batteries
to
the market
promptly in order to gain customer
feedback and continue to improve
them.
With
the
rapid
expansion
of
EV
usage,
we
are
working
to
build
a
flexible
system
that
can
stably
supply
the
required
volume
of
batteries
at
the
required
time
while
meeting
the
needs
of
various
customers
in
each
region
around
the
world.
To
this
end,
we
intend
to
establish
needed
technologies
by
conducting
a
certain
amount
of
in-house
production
in
the
pursuit
of
our
battery
development
concept
of
achieving
batteries
that
can
be
used
with
peace
of
mind.
We
will
then
cooperate
and
collaborate
with
partners
who
understand
and
will
put
into
practice
our
concept.
We
will
also
proceed
with
discussions
with
new
partners
in
some
regions.
Our
approach
to
production
can
be
described
as
“starting
up
using
small
basic
units.”
This
approach
draws
on
lessons
learned
from
the
global
financial
crisis.
It
is
difficult
to
notice
latent
risks
when
production
is
growing.
Because
of
this,
we
have
to
take
a
risk-controlled
approach
to
growth
based
on
Toyota’s
philosophy
of
“making
only
what
is
needed,
when
it
is
needed,
and
only
in
the
amount
needed.”
For
example,
the
production
of
all-solid-state
batteries
will
start
with
batteries
for
HEVs,
which
we
have
been
developing
for
years
and
that
require
a
small
battery
volume,
rather
than
building
a
massive
production
line
for
batteries
for
BEVs,
which
require
a
larger
volume
of
batteries.
This
will
not
only
enable
us
to
accelerate
the
release
of
the
products
but
also
position
us
to
better
focus
on
improving
manufacturing
technologies.
Moreover,
Toyota’s
strategy
of
“starting
up
using
small
21
basic
units”
is
also
meant
to
enable
the
company
to
swiftly
respond
to
changes
arising
from
the
arrival
of
a
new
technology,
which
often
occurs
in
the
course
of
a
product
cycle
when
the
manufacturing
costs
for
the
old
model
come down and stabilize.
In the
field
of
FCEVs,
we
released
the completely
redesigned
Mirai
in
December
2020. Premised
on
the
use
of
an
FCEV
system,
the
development
of
the
second
generation
Mirai
was
promoted
to
deliver
a
futuristic
premium
car
that
will
be
genuinely
appreciated
and
sought
after
by
our
customers.
Specifically,
we
strove
to
deliver
a
vehicle
that
can
win
drivers’
hearts
during
and
after
driving,
if
not
from
the
moment
when
they
first
catch
sight
of
it.
Moreover,
Toyota
aims
to
become
a
fuel
cell
(“FC”)
system
supplier
supporting
the
realization
of
a
hydrogen-powered
society.
In
line
with
this
aim,
we
provide
a
variety
of
business
operators
with
a
compact
FC
system
module
package
that
we
have
developed.
This
package
consists
of
FC
stacks
for
the
second-
generation Mirai,
which boast higher
performance, as
well as air supply, hydrogen supply, cooling, power
control
and
other
FC
system-related
parts.
In
North
America,
we
have
unveiled
a
new
prototype
for
an
FC
commercial
heavy-duty
truck
that
uses
the
second-generation
FC
system
installed
on
the
new
Mirai.
This
truck
boasts
considerably
improved
performance,
including
more
powerful
acceleration
and
flexible
driving
response.
Furthermore,
having
attained
a
maximum
loaded
weight
of
80,000
pounds
(approximately
36
tons)
and
cruising
range
of
300
miles
(more
than
480
kilometers),
the
truck
is
designed
to
accommodate
a
range
of
commercial
truck
needs.
We
intend
to
conduct
the
verification
testing
of
this
new
FC
truck
in
actual
cargo
transport
operations.
Hydrogen
Engine
Toyota Motor Corporation
announced in April
2021 that it is working
on the technological development
of a
hydrogen
engine.
While
FCEVs
are
driven
by
electric
motors
powered
using
electricity
generated
by
a
chemical
reaction
between
hydrogen
and
airborne
oxygen,
vehicles
powered
by
hydrogen
engines
get
their
power
by
directly
burning
hydrogen
as
fuel
in
a
modified
conventional
gasoline
engine
setup.
The
fuel
is
100-percent
pure
hydrogen,
unmixed
with
gasoline.
As
no
fossil
fuels
are
burned,
except
for
the
combustion
of
minute
amounts
of
engine
oil
during
driving,
hydrogen
engine
vehicles
emit
nearly
no
CO
2
when
in
operation.
To
realize
carbon
neutrality,
it
will
be
important
to
increase
people’s
options
without
losing
sight
of
the
goal.
We
believe
that
hydrogen
engine
technology,
which
draws
on
many
decades
of
tried
and
tested
internal
combustion
engine
technology, has
the potential
to contribute
significantly
to
carbon neutrality;
it
is also
one option for
safeguarding
engine-related employment
in Japan’s automobile industry.
At the end of
2020, Master Driver
Morizo (President
Akio Toyoda, using his
race driver name) swiftly
came
to a decision:
he would enter the
2021 Super Taikyu
Series race driving
a prototype hydrogen engine
vehicle, and
thereby
develop
the
vehicle
on
the
front
line
of
motorsports.
Development
in
motorsports
takes
place
on
a
much
shorter timeline
than
it does
for mass-produced
automobiles.
It is
also more
flexible.
To realize carbon
neutrality,
we
determined
that
motorsports
is
the
most
appropriate
venue
for
developing
hydrogen
engines.
To
realize
carbon
neutrality,
we
need
to
expand
options
for
creating,
distributing,
and
using
energy,
and
cooperation
with
a
wide
range
of
companies
will
be
indispensable.
Through
developing
the
hydrogen
engine
at
the
2021
Super
Taikyu Series, we gained many friends with the
requisite will and passion for
such collaboration.
In
cooperation
with
Kawasaki
Heavy
Industries,
SUBARU
CORPORATION
(“SUBARU”),
Mazda
Motor
Corporation
(“Mazda”),
and
Yamaha
Motor
Company
(“Yamaha”),
we
announced
that
we
would
try
to (1)
enter
races
using
carbon-neutral
engines
(Mazda
using
next-generation
biofuels
and
SUBARU
and
Toyota
taking
on
the
challenge
of
racing
in
the
Super
Taikyu
Series
2022
using
biomass-derived
synthetic
fuel)
and
(2)
consider
using
hydrogen
engines
for
two-wheeled
vehicles
(Kawasaki
Heavy
Industries
and
Yamaha
initiating
consideration
of
the
possibility
of
joint
research).
In
this
way,
we
believe
that
the
automobile
industry
will
become
a
pacesetter
promoting
initiatives
that
play
to
industry
strengths
while
aiming
for
the
realization
of
a
carbon-neutral
society.
Through
this
such
intentional
application
of
passion
and
action,
the
future
vision
for
the
next
10
to
20
years
will
evolve.
With
courage
and determination,
we
can
shape
this
future
vision
and
continue
to
take on challenges and go beyond the industry
borders going forward.
22
Software
and
Connected
Initiatives
Amid
this
era
identified
by
CASE,
automobile
manufacturing
requires
technological
development
in
such
new
fields
as
“electrification,”
“automated
driving,”
and
“connectivity.”
Among
these
fields,
software
is
becoming
an
important
factor
in
determining
product
appeal.
Today’s
cars
are
equipped
with
more
than
50
electronic control
units, or ECUs, and
use as many as 1,000 chips. Furthermore,
society has entered the
age of the
internet
of
things,
and
things
being
connected
has
become
the
norm.
Cars
are
also
equipped
with
communication
devices,
further
advancing
their
electronification,
and
the
volume
of
software
(lines
of
code)
used
in
cars
is
thus
growing
ever
larger.
Facing
this
major
transformation
in
the
automobile
industry,
Toyota
is
paying
particular
attention
to
how
cellular
phones
have
changed
over
time.
As
the
shoulder
phone
evolved
into
the
feature
phone
and
then
into
the
smartphone,
the
phone,
which
had
become
commoditized,
became
linked
with
information,
creating
new value
through
new experiences
and
quickly
spread
around the
world.
This change
was
supported
by
software
and
connected
technologies.
Due
to
the
CASE
revolution,
cars
are
becoming
more
deeply
connected
to
communities
and
people’s
lives
through
information,
becoming
a
more
integral
part
of
social
systems.
At
the
same
time,
Toyota
will
aim
to
have
cars
be
more
linked
to
information,
and
through
the
movement
of
people,
goods, and things, provide new value through new experiences
and by bringing excitement to customers.
When it
comes to
the manufacturing
of
cars, Toyota
has a basic
stance
that has
been handed
down internally
over
the
years:
we
stick
to
our
principles
and
internalize
important
elements
by
attempting
to
first
achieve
them
on
our
own.
We
also
continue
to
introduce
improvements
on
the
front
lines
to
enhance
our
competitive
advantage.
Since
its
founding,
Toyota
has
been
producing
various
production
equipment
in-house
as
necessary.
In
the
1990s,
we
pursued
the
in-house
design
of
ECUs
and
established
an
electronics
plant,
a
chip
plant,
and
a
battery
plant.
These
efforts
eventually
led
to
the
commercialization
of
the
Prius,
the
world’s
first
mass-produced
HEV.
Toyota
has
always
maintained
a
strong
awareness
of
the
real
world
regardless
of
the
era
at
hand,
pursued
our
principles,
and
promoted
internalization.
That
is
why
in
the
area
of
software
and
connected
technologies,
we
established
the
Toyota
Research
Institute
(“TRI”),
Woven
Planet
Holdings,
and
Toyota
Connected,
and
it
is
why
we
are
working
on
the
development
of
the
e-Palette,
the
construction
of
Woven
City
as
a
town
for
pilot
testing,
and the development of the Arene platform
and other technologies.
To date,
Toyota
has
sold
10
million
Lexus
and Toyota
vehicles
that
are
connected
cars,
mainly
in
Japan,
the
United States,
Europe,
and
China.
Toyota’s
vision
of the
connected
car
is not
simply
one
of connecting
the
car
to
the internet.
Rather, it
is about
providing
customers with
emotional
experiences through
the movement
of people,
goods,
and
activities
a
vision
centered
on
people
that
we
call
“human
connected.”
To
achieve
this,
we
are
operating a
call center
as a
point of
contact
with customers;
the Toyota
Smart
Center, which
provides a
variety of
services;
and
the
Toyota
Big
Data
Center,
which
utilizes
vehicle
information
gathered
from
cars.
In
addition,
we
have
established
the
Mobility
Service
Platform
(“MSPF”)
to
provide
mobility
services
and
are
promoting
collaboration
with
service
providers.
Connected
cars
and
connected
technologies
will
be
applied
to
a
variety
of
areas,
and
we
anticipate
that
which
is
to
be
connected
will
expand
to
include
people,
cars,
communities,
and
society
(business-to-society,
or
BtoS).
Toyota
will
handle
the
information
gathered
from
customers
and
vehicles
with
care,
utilizing
it
for
the
happiness
of
customers
and
the
development
of
society
while
creating
new
value
from experiences centered on mobility.
With
the
e-Palette
BEV
used
in
the
Olympic
Village
for
the
Olympic
and
Paralympic
Games
Tokyo
2020,
our
goal
was
to
create
mobility
that
integrates
cars
and
information
and
that
coordinates
with
the
community.
During
the
Games,
49,000
athletes,
staff,
and
volunteers
used
e-Palette.
We
also
developed
a
fleet
management
system for
e-Palettes
based on
the principles
of the
TPS to ensure
effective, efficient,
and accurate
operation. The
system
monitors
the
vehicles
remotely
and
operates
them
in
a
just-in-time
fashion
according
to
the
conditions
of
the
surrounding
environment
and
the
number
of
passengers.
All
of
this
was
realized
via
the
MSPF
that
Toyota
has
been
building
and
refining.
In
the
future,
we
expect
that
these
technologies
will
be
applied
to
the
Sienna
Autono-MaaS
minivan
being
developed
in
the
United
States
for
use
as
a
robotaxi,
and
that
the
MSPF
will
be
used not only for automated vehicles,
but also for regular commercial
vehicles and logistics.
23
In
this
way,
software
has
the
power
to
promptly
turn
ideas
into
products.
The
aim
of
Arene,
the
vehicle
development
platform
that
Toyota
and
Woven
Planet
are
focused
on,
is
to
continue
fundamentally
changing
the
development
of
software
for
vehicles.
The
most
notable
characteristics
of
Arene
are
that
it
absorbs
the
differences
in
vehicle
hardware
specifications
(abstraction)
and
employs
hardware
abstraction
layers
that
enable
hardware
to
be
controlled
with
universal
methods.
This,
in
turn,
enables
the
independent
development
of
hardware
and
software
as
well
as
the
reuse
of
software.
Arene
leverages
the
strengths
of
hardware
cultivated
by
Toyota to achieve the development of safe,
high-quality, and advanced software.
Because
increasingly
complicated
software
development
is
becoming
a
bottleneck
for
cars,
too,
there
is
a
need
for
a
revolutionary
vehicle
operating
system
that
can
solve
these
issues.
The
vehicle
operating
system
will
achieve
TPS
in
software
development
as
well,
and
we
must
continue
to
realize
combinations
of
good
hardware
and
software.
For
example,
when
developing
automated
driving
software,
the
on-board
software
needed
for
automated
driving
actually
makes
up
only
a
small
portion
of
it;
the
rest
comprises
various
tools,
such
as
data
processing
by
the
machine
learning
system,
mounting,
code
review,
software
updates,
log
analyses,
and
simulations.
Basically,
most
of
the
software
we
develop
is
used
“off-board”
(that
is,
outside
vehicles)
or
through
the
cloud.
Arene
is
used
to
develop
frameworks
for
vehicle
development
and
development
environments
based
on
those
frameworks
as
well
as
to
build
ecosystems
for
mobility
development.
Using
industry-leading
software
technologies, we will strive to continue
providing privacy-conscious, secure,
and safe cars.
Furthermore,
application
development
on
Arene
is
also
easy.
We
believe
partner
companies
will
be
able
to
program
applications
more
efficiently
using
Arene’s
application
programming
interface
(a
mechanism
that
can
share software functions) and software
development kit, which includes
simulation environments. In
this way, we
believe
development
on
Arene
will
swiftly
realize
commercialization
and
enables
users
to
share
the
fun
of
providing
new
ideas
that
appeal
to
customers
while
meeting
the
expectations
of
worldwide
partners
and
developers as well as the Toyota brand’s
high-quality standards.
The
portion
of
a
car’s
value
attributable
to
software
is
growing.
By
internalizing
the
parts
central
to
Toyota’s
future,
we
will
strategically
ensure
the
strengths
of
our
hardware
and
software
through
internal
production,
compartmentalize
development
undertaken
with
partners,
and
accelerate
the
speed
of
mass
production.
For
these
initiatives,
we
are
building
a
software
development
structure
on
a
3,000-person
scale
for
Toyota, Woven Planet,
and Toyota
Connected and
on a
18,000-person scale
when including
associates
accounted
for
by
the
equity
method.
We
are
also
strengthening
the
teams
responsible
for
the
internal
production
and
development of software.
Through connected technologies,
we can contribute
to carbon neutrality
by gaining
a better understanding
of
the
characteristics
of
each
region
in
the
form
of
data
and
combining
this
knowledge
with
realized
technologies.
For
example,
according
to
market
data,
in
Japan,
the
engine
is
turned
off
for
half
of
all
driving
time
in
hybrid
electric
vehicles,
or
HEVs,
while
for
plug-in
hybrid
electric
vehicles,
or
PHEVs,
the
engine
is
turned
off
for
as
much
as
80
percent.
We
believe
HEVs
and
PHEVs
can
evolve
into
environment-friendly
vehicles
to
an
even
higher degree
by
upgrading
the
switching
control
of
engines
and
electric
motors.
In
other
words,
there
is
room
to
expand the possibilities of both
HEVs and PHEVs.
One mechanism
that
we
believe
will
enable
this
is
geofencing
technology.
A
portmanteau
of
geography
and
fence,
geofencing
refers
to
the
combination
of
navigation
and
cloud
technologies
to
enable
the
automatic
switching
of
engine
and
motor
functions
in
real
time
to
reflect
driving
locations
and
driving
times
based
on
geographic
data.
For
example,
in
zero-emission
regulation
regions
that
limit
vehicle
operation
to
only
BEVs
during certain
time
periods,
geofencing
would automatically
control the
functions
of
HEVs and PHEVs
to ensure
compliance with regulations.
Furthermore,
geofencing
would
enable
anticipatory
eco-driving
that
switches
over
to
BEV
driving
as
appropriate
by
predicting
the
driving
burden
based
on
the
driving
environment
up
to
the
destination.
We
believe
utilizing
connected
technologies
to
control
HEVs
and
PHEVs
more
intelligently
will
make
it
possible
to
further
24
promote
energy
saving
in
cars.
The
new
NX
features
a
mechanism
that
switches
to
HEV
control.
We
expect
that
in the
near
future
we
will
be
able to
conduct
an over-the-air
(“OTA”) update
of
its software
so
that
it will
be
able
to use geofencing technology.
In
October
2021,
in
advance
of
introducing
geofencing
technology
that
is
under
development
with
an
eye
toward
practical
application,
we
introduced
anticipatory
eco-driving
(anticipatory
EV/HEV
mode
switching
control)
in
the
Japanese
market.
It
realizes
highly
efficient
driving
by
automatically
switching
between
EV
and
HEV modes depending on the charge left in the battery
and the road conditions and characteristics.
OTA refers to using
wireless connections
to keep the software (control
software and high-precision
mapping
software)
updated
to
the
latest
versions.
This
means
that
after
a
car’s
purchase,
new
functions
continue
to
be
added
and
its
performance
continues
to
be
enhanced,
thereby
continuing
the
vehicle’s
evolution
into
a
safer
and
more secure car that has the
latest driving assistance
technology.
For
the
LS
and
Mirai
launched
in
Japan
in
April
2021,
we
have
included
cars
that
feature
the
latest
Advanced
Drive
function
of
the
newest
sophisticated
driving
assistance
technologies
developed
by
Toyota
Teammate/Lexus
Teammate,
and
they
are
eligible
for
related
software
updates
on
an
ongoing
basis.
The
GR
Yaris
“Morizo
Selection”
is
a
new
initiative
based
on
GR
Yaris
that
combines
the
ROOKIE
Racing
privateer
team
run
by
Morizo
(the
racing
driver
name
for
Akio
Toyoda,
our
President)
and
Toyota’s
KINTO
car
subscription.
We
will
continue
to
evolve
each
car
to
best
match
each
customer
by
reflecting
updates
(which
are
based
on
feedback
and
data
gained
in
races
participated
in
by
Morizo
and
ROOKIE
Racing)
and
personalization
(which
is
based
on
customer
driving
data)
in
the
software
in
GR
Garage
shops
through
wired
connections
(not
OTA). Furthermore, we offer
better driving
methods and support
the enhancement
of driving skills.
Through this,
we strive to realize cars that
evolve to suit people by updating to
the latest software in line
with each customer.
Cars
have
a
wide
range
of
applications,
from
passenger
cars
to
MaaS
and
commercial
vehicles,
and
we
will
continue
to
expand
the
regions
where
we
operate
going
forward.
Needs
are
increasingly
diversifying,
and
cars
can
be
used
in
a
myriad
of
ways
to
meet
them.
Our
efforts
thus
encompass
people’s
problems
and
social
issues,
smiles and joy, and needed technological
development.
The
automobile
industry
must
move
people
while
also
achieving
coexistence
with
local
communities.
For
the
future
and
for
children,
the
Toyota
family
of
companies
is
working
on
producing
happiness
for
all
through
freedom
of
movement
for
all
and
the
provision
of
exciting
experiences.
We
will
continue
to
enhance
the
excitement
that
can
be
experienced
by
being
able
to
move
by
combining
real
cars
and
the
power
of
software.
If
we
combine
innovation
with
technology,
we
expect
that
the
value
of
cars
will
be
enhanced
further.
We
will
also
contribute
to
the
further
development
of
society
by
going
beyond
the
borders
of
cars
and
contributing
to
community building and the creation
of society-wide platforms.
Efforts
in
Realizing
a
Safe
Mobility
Society
According to
a
2018
World
Health Organization
survey,
1.35
million
people per
year
die
in traffic
accidents
worldwide.
While
the
number
of
deaths
due
to
traffic
accidents
has
been
gradually
decreasing
in
Japan,
the
United
States,
and
Europe,
it
has
been
increasing
elsewhere,
especially
in
emerging
nations,
as
improvements
in
safety
education
and
transportation
infrastructure
have
not
kept
up
with
increases
in
cars
on
the
road.
Unless
countermeasures
are
implemented,
traffic
accident
causalities
are
predicted
to
become
the
seventh
leading
cause
of
death
globally
by
2030.
For
Toyota
to
achieve
its
ultimate
goal
of
eliminating
traffic
accident
causalities,
the
development
of
safe
vehicles
is
of
course
important,
but
it
is
also
essential
to
educate
people,
including
drivers
and
pedestrians,
and
to
ensure
safe
traffic
infrastructure,
including
traffic
signals
and
roads.
To
achieve
a
safe
mobility
society,
Toyota
believes
it
will
be
important
to
implement
an
integrated
three-part
initiative
involving
people,
vehicles,
and
the
traffic
environment,
as
well
as
to
pursue
real-world
safety
by
learning
from
actual
accidents
and
incorporating
that
knowledge
into
vehicle
development.
“Integrated
Safety
Management
Concept”
is Toyota’s
basic philosophy
behind its
technologies
for eliminating
traffic
casualties
and is
moving forward
with
development.
25
Toyota
provides
optimized
driver
support
at
every
stage
of
driving,
from
parking
to
normal
operation,
the
moment
before
a
collision,
during
a
collision,
and
post-collision
emergency
response.
We
also
aim
to
enhance
safety
by
strengthening
inter-system
coordination,
rather
than
considering
each
system
separately.
These
are
the
approaches behind our Integrated Safety
Management Concept.
Based
on
this
Integrated
Safety
Management
Concept,
Toyota
is
working
on
active
safety,
passive
safety,
emergency response and initiatives
for people.
With
regards
to
active
safety,
the
Toyota
Safety
Sense
systempackages
multiple
active
safety
functions
based
around
three
major
functions
considered
effective
in
reducing
serious
traffic
accidents
causing
death
or
injury. These
are
Pre-Collision
Safety,
which helps
avoid and
mitigate
damage from
collisions
with cars
ahead or
pedestrians; Lane
Departure Alert,
which contributes to
preventing accidents
caused by leaving
the lane of
travel;
and
Automatic
High
Beam,
which
helps
ensure
clear
sight
in
front
of
the
vehicle
at
night.
In
2018,
we
expanded
the system’s driving
assistance functions
to offer
those such as nighttime pedestrian
and daytime cyclist detection
and
Lane
Tracing
Assist.
Since
its
market
launch
in
2015,
Toyota
Safety
Sense
has
been
installed
in
more
than
30
million
vehicles
globally
as
of
March
2022.
Toyota
Safety
Sense
is
now
available
on
nearly
all
passenger
car
models
(as
standard
or
an
option)
in
the
Japanese,
United
States,
and
European
markets.
It
has
also
been
introduced
in
a
total
of
120
countries
and
regions,
including
such
key
markets
as
China,
other
select
Asian
countries, the Middle East, Australia
and the Central and South America region.
Another
important
concept
is
passive
safety.
In
the
context
of
automobiles,
passive
safety
combines
a
body
structure that
absorbs
collision energy
with support
to protect
vehicle
occupants to minimize
collision
damage. In
1995,
in
the
pursuit
of
world-leading
safety,
Toyota
created
its
own
stringent
internal
target
related
to
passive
safety
performance
called
“Global
Outstanding
Assessment
(“GOA”)”
and
developed
a
collision-safety
body
structure
and
passenger
protection
devices.
Since
then,
to
maintain
its
leadership
in
this
field,
Toyota
has
continued
to
evolve
GOA, striving
to
improve
the
real-world
safety
performance
of
its
vehicles
in
a
wide
variety
of accidents.
In
addition,
to
analyze
vehicle-related
injuries,
Toyota
collaborated
with
Toyota
Central
R&D
Labs.,
Inc.
to
develop
the
Total
Human
Model
for
Safety
(“THUMS”),
a
virtual
human
body
model.
THUMS
is
being
used
in
the
research
and
development
of
a
variety
of
safety
technologies,
including
seat
belts,
airbags,
and
other
safety
equipment,
as
well
as
vehicle
structures
that
mitigate
injuries
in
accidents
involving
pedestrians.
Toyota
made
THUMS
freely
available
through
its
website
in
January
2021
in
the
hope
that
it
will
be
used
by
more
people
across more applications.
Every minute
counts in
the response
to an accident
or medical
emergency. As a
way of using connectivity
to
support
safety,
in
2000,
Toyota
rolled
out
its
HELPNET
®
service,
an
emergency
reporting
system
utilizing
the
G-Book
information
network
(now
T-Connect)
and
G-Link
in
Japan.
In
the
event
of
an
accident
or
medical
emergency,
HELPNET
®
contacts
a
dedicated
operator
who
will
arrange
for
the
rapid
dispatch
of
an
emergency
vehicle
from
the
police
or
fire
department/emergency
services.
Specifically,
HELPNET
®
automatically
contacts
an
operator
when
the
airbags
deploy
and
supports
D-Call
Net
®
,
a
service
available
throughout
Japan
that
makes
quick
deployment
decisions
for
air
ambulances.
This
service
is
provided
by
sending
vehicle
data
to
the
HELPNET
®
center
from
an
on-board
data
communication
module
(“DCM”).
DCM
is
installed
as
a
standard
feature in all new passenger vehicles
in Japan.
Toyota
believes
that
education
is
an
important
part
of
preventing
traffic
accidents.
To
prevent
accidents
involving
small
children,
in
cooperation
with
Toyota
dealers
across
Japan,
Toyota
has
been
donating
traffic
safety
teaching
materials
to
kindergartens
and
nursery
schools
nationwide
since
1969.
In
2020, we
revamped
our
educational
website
for
children
and
guardians,
and
we
use
our
website
and
social
media
to
raise
awareness
of
traffic safety while walking
and cycling.
For
drivers,
we
periodically
hold
the
Toyota
Driver
Communication
safe
driving
technique
seminar
at
Toyota
Safety
Education
Center
Mobilitas,
on
the
grounds
of
Fuji
Speedway.
Additionally,
in
step
with
the
26
government-promoted
Safety
Support
Car
program,
we
are
working
with
Toyota
dealers
across
Japan
to
roll
out
safety
and
assurance
activities
under
the
name
“Support
Toyota”
to
help
realize
car
ownership
experiences
that
offer safety and assurance.
Commercial
Sector
Initiatives
On
March
24,
2021,
Toyota,
Isuzu
and
Hino
agreed
to
form
a
new
alliance
in
commercial
vehicles
and
established
CJPT
to
promote
this
alliance.
CASE
technologies
can
only
contribute
to
society
once
they
become
widespread.
Commercial
vehicles
can
play
important
roles
in
CASE
technology
dissemination,
as
they
travel
long
distances
for
extended
periods
of
time
to
support
the
economy
and
society
and
can
be
easily
linked
with
infrastructure
development.
By combining
the commercial
vehicle
foundations cultivated
by
Isuzu and
Hino with
Toyota’s
CASE
technologies,
the
companies
aim
to
accelerate
the
societal
implementation
and
adoption
of
CASE technologies and
services and thereby
help address social
issues and
contribute to the
realization
of carbon
neutrality.
Specifically,
the
three companies
are
jointly
working
on the
development
of
BEVs and
FCEVs, autonomous
driving
technologies,
and
electronic
platforms
centered
on
the
domain
of
small
commercial-purpose
trucks.
While
working
together
on
BEVs
and
FCEVs
to
reduce
vehicle
costs,
the
companies
plan
to
advance
infrastructure-coordinated
endeavors,
such
as
introducing
FCEV
trucks
with
the
goal
of
implementing
a
hydrogen-based
society
in
Japan’s
Fukushima
Prefecture,
thereby
building
an
implementation
model
for
a
city
with
a
population
of
300,000
people
before
endeavoring
to
apply
this
model
in
the
many
similar-sized
cities
nationwide.
Furthermore,
working
toward
carbon
neutrality,
in
addition
to
promoting
the
spread
of
electrified
vehicles
that
are
suited
to
logistics
uses,
the
companies
will
work
to
increase
transport
efficiency
based
on
the
JIT
logistics
approach
of
delivering
what
is
needed,
when
it
is
needed,
in
the
amount
needed,
expanding
the
range of the options for achieving
carbon neutrality.
Working
together,
we
believe
Isuzu
and
Hino
are
able
to
reach
most
of
Japan’s
truck
customers
and
learn
about
their
real
needs
and
concerns.
Distribution
by
trucks
accounts
for
the
vast
majority
of
overland
logistics,
and
the
transportation
sector
(including
buses
and
taxis)
involves
a
significant
number
of
people.
Commercial
vehicles
account
for
a
significant
amount
of
the
total
distance
traveled
by
automobiles
and
CO
2
emissions
from
automobiles
in
Japan.
Furthermore,
the
logistics
companies
operating
in
Japan
currently
face
numerous
management
issues,
such
as
high-frequency
distribution,
harsh
work
environments,
labor
shortages,
and
rising
burdens.
The
power
of
CASE,
centered
on
connected
technologies
and
services,
is
expected
to
deliver
improvements that help resolve
these issues.
Solving these
kinds of
social issues
is not
something
that one company
can accomplish
alone. It is
necessary
to
seek
a
wide
range
of
like-minded
partners,
apply
their
different
strengths,
and
work
together
for
the
sake
of
those
supporting
transportation
and
for
society.
As solutions
to
such
issues
progress,
we
expect
work
in
overland
transport
to
become
more
appealing,
leading
to
an
increase
in
the
number
of
drivers
and
other
logistics
professionals.
On
July
21,
2021,
Suzuki
and
Daihatsu
joined
CJPT.
As
many
of
Japan’s
roads
are
so
narrow
that
only
mini-vehicles
can
easily
use
them,
mini-vehicles
are
collectively
a
kind
of
“people’s
car,”
made
to
suit
the
roads
of Japan.
They are
a practical
and
sustainable
lifeline for
people
across the
country, and
have continued
to evolve
alongside
changing
lifestyles.
Similarly,
commercial
mini-vehicles
are
able
to
effectively
cover
areas
that
their
small
size
makes
accessible,
supporting
logistics
operations
mainly
in
the
last
mile.
For
more
than
60
years,
Suzuki
and
Daihatsu
have
been
protecting
these
lifelines
and
driving
the
market
forward.
We
believe
that
by
working together,
these
two
companies
will
be able
to
access the
real
needs
and concerns
of
a significant
number
of Japan’s mini-vehicle users.
We
expect
that
expanding
CJPT
to
include
mini-vehicles
will
enable
efficient,
integrated
logistics,
linking
the main arteries
of logistics
(handled by trucks)
with the
capillaries of
logistics (the
domain of commercial
mini-
27
vehicles)
while
leveraging
connected
technologies
and
abundant
data.
This
new
collaboration
is
also
aimed
at
promoting
the
broader
use
of
affordable
advanced
safety
technologies
and
electrification
by
leveraging
Suzuki
and Daihatsu’s strengths in high-quality,
low-cost manufacturing
and Toyota’s CASE technologies.
Amid
pressure
to
enhance
cost
competitiveness,
maintaining
a
competitive
edge
in
the
area
of
commercial
vehicle
electrification
is
increasingly
challenging.
Competitiveness
increasingly
hinges
on
connected
technologies
and
uses
of
batteries
and
other
technologies.
Accordingly,
manufacturers
must
step
up
the
unique
added value that they offer.
In
addition
to
electrification,
improving
transport
efficiency
will
contribute
greatly
to
realizing
carbon
neutrality.
The
five
companies
that
make
up
CJPT
plan
to
link
their
connected
technology
platforms
to
build
a
more
comprehensive
platform
for
commercial
vehicles
and
leverage
the
TPS,
one
of
Toyota’s
strengths,
to
realize
JIT
logistics
and
increase
transport
efficiency,
thereby
helping
to
reduce
CO
2
emissions.
Using
connected
technologies
to
link
logistics
from
the
major
arteries
to
the
fine
capillaries,
from
producers
to
consumers,
using
truck
logistics
and
local
mini-vehicle-based
distribution,
JIT
logistics
have
the
potential
to
lower
running
costs
for
logistics
vendors
and
sustainably
improve
logistics.
Going
forward,
we
believe
the
five
companies
will
deepen their collaboration
while openly
considering cooperation with other
like-minded partners, working
to help
fulfill
the
automotive
industry’s
mission
of
helping
improve
people’s
lives
and
leave
a
better
Japan
and
a
better
planet for the next generation.
Woven
City
The
Woven
City
project,
first
announced
in
January
2020,
officially
broke
ground
on
February
23,
2021.
Woven
City
will
demonstrate
cutting
edge
technologies
in
such
areas
as
automated
driving,
MaaS,
personal
mobility,
robotics,
smart
homes,
and
artificial
intelligence
in
a
real
living
environment.
By
rapidly
implementing
development
and
demonstration
cycles
of
technologies
and
services
in
this
human-centered
city,
we
aim
to
continue
to
produce
new
value
and
business
models
by
utilizing
the
mobility
of
“information,”
“goods,”
and
“people” to support daily life.
Woven
City
will
be
constructed
on
the
site
of
Toyota
Motor
East
Japan’s
former
Higashi-Fuji
Plant,
which
was
a
pillar
of
production
for
Toyota
for
53
years,
starting
in
1967.
At
its
peak,
the
plant
had
2,000
employees,
and
a
total
of
7,000
individuals
worked
there
over
its
history,
producing
such
vehicles
as
the
Toyota
Century,
Toyota’s
flagship
chauffeur
car
infused
with
Toyota
craftsmanship,
and
the
JPN
Taxi,
a
car
that
requires
many
times the durability of an
ordinary passenger car.
The
concept
for
Woven
City
can
be
traced
back
to
the
Great
East
Japan
Earthquake
in
2011.
As
our
President,
Akio
Toyoda
sought
to
create
jobs
for
the
region’s
people,
who
were
hit
hardest
by
the
disaster,
by
creating
a
third
base
of
operations
in
the
Tohoku
region.
Guided
by
his
strong
leadership,
Toyota
established
Toyota
Motor
East
Japan,
Inc.
in
2012.
However,
this
also
led
to
the
difficult
decision
to
close
the
Higashi-Fuji
Plant.
Looking
for
a
way
to
carry
on
the
Higashi-Fuji
Plant’s
legacy
of
manufacturing
to
help
create
future
mobility for
the
next
50 years,
he arrived
at the
idea of
transforming
the site
into
a connected
city as
a large-scale
demonstration experiment.
Under
the
Woven
City
project,
we
are
imagining
the
life
of
each
resident
as
we
seek
to
design
a
city
that
will
most
make
people
happy.
Working
with
researchers,
engineers,
and
scientists,
we
intend
to
demonstrate
future
technologies
in
both
the
virtual
and
the
real
world
and
to
roll
out
the
resulting
technologies
and
products
developed
around
the
globe.
Woven
City
will
be
a
constantly
improving,
ever-evolving
city
rooted
in
Toyota’s
kaizen
approach
thinking
that
there
is
always
a
better
way.
We
will
work
with
partners
who
share
our
aspiration in this quest to realize
better living and mobility
for all.
Woven
City
will
comprise
three
types
of
roads,
woven
together
like
warp
and
weft:
paths
for
people,
roads
shared
by
people
and
personal
mobility
devices,
and
roads
for
autonomous
vehicles.
Aimed
at
realizing
safe
28
mobility,
it
will
be
a
sort
of
test
course
for
the
integrated
three-part
development
of
automated
driving
at
the
levels
of
people,
vehicles,
and
the
traffic
environment.
In
its
early
stages,
we
anticipate
Woven
City
will
house
around
360
residents,
comprising
mainly
seniors,
families,
and
inventors.
In
the
future,
we
believe
the
city
will
have
more
than
2,000
residents,
including
Toyota
employees,
demonstrating
technologies
in
mobility
and
a
wide
range
of
other
fields,
from
logistics
to
energy,
food
and
agriculture
as
it
grows
into
an
environment
conducive
to
the timely generation of new inventions
that address social issues.
The
name
“Woven
City”
comes
from
Toyota’s
origins
in
automatic
looms.
Sakichi
Toyoda,
the
founder
of
the
Toyota
family
of
companies,
was
driven
to
invent
an
automatic
loom
out
of
a
desire
to
make
his
mother’s
work
easier.
We
have
guarded
and
nurtured
this
spirit
of
service
to
others
ever
since.
Woven
City
will
take
up
this commitment from
the Higashi-Fuji Plant, growing and evolving as
the foundation for a new era at Toyota.
Financial
Services
Toyota’s
financial
services
include
loan
programs
and
leasing
programs
for
customers
and
dealers.
Toyota
believes
that
its
ability
to
provide
financing
to
its
customers
is
an
important
value-added
service.
In
July
2000,
Toyota
established
a
wholly-owned
subsidiary,
Toyota
Financial
Services
Corporation,
to
oversee
the
management
of
Toyota’s
finance
companies
worldwide,
through
which
Toyota
aims
to
strengthen
the
overall
competitiveness
of
its
financial
business,
improve
risk
management
and
streamline
decision-making
processes.
Toyota
has
expanded
its
network
of
financial
services,
in
accordance
with
its
strategy
of
developing
auto-related
financing
businesses
in
significant
markets.
Accordingly,
Toyota
currently
operates
financial
services
companies
in 42 countries and regions, which support its
automotive operations globally.
Toyota’s
sales
revenues
from
its
financial
services
operations
were
¥2,324.0
billion
in
fiscal
2022,
¥2,162.2
billion
in
fiscal
2021
and
¥2,193.1
billion
in
fiscal
2020.
While
there
were
negative
factors
in
fiscal
2022,
such
as
tight
global
semiconductor
supply
relative
to
demand,
supply
constraints
on
new
cars
due
to
the
impact
of
COVID-19,
and
increased
competition
with
other
financial
institutions,
Toyota’s
business
saw
steady
growth
mainly
due
to
the
accumulated
balance
of
earning
assets
resulting
from
enhanced
used-vehicle
financing,
higher
used-vehicle
prices
in
the
United
States
and
other
regions,
lower
interest
rates
worldwide
and
other
measures.
Under
such
circumstances,
as
a
result
of
Toyota’s
continued
collaboration
with
dealers
in
various
countries
and
regions
and
efforts
to
expand
products
and
services
that
meet
customer
needs,
Toyota’s
share
of
financing
provided
for
new
car
sales
of
Toyota
and
Lexus
vehicles
in
regions
where
Toyota
Financial
Services
Corporation operates
remained
at
a
high level
of
approximately
30%,
and the
balance
of earning
assets continued
to
steadily
increase,
with
the
exception
of
some
countries.
In
addition,
Toyota
is
making
efforts
to
provide
both
its
customers
and
dealers
with
stable
financial
services
by
diversifying
its
funding
methods
in
recent
years,
such
as
issuing
Green
Bonds
in
addition
to
using
already
existing
means
as
commercial
paper,
corporate
bonds,
bank
borrowings,
ABCP
(Asset
Backed
Commercial
Paper)
and
ABS
(Asset
Backed
Securities).
Furthermore,
Toyota
continued
to
perform
detailed
credit
appraisals
and
serve
customers
by
monitoring
bad
debt
and
loan
payment
extensions,
and
the
percentage
of
credit
losses
remained
low,
at
0.23%
and
0.17%
in
fiscal
2021
and
2022,
respectively.
Toyota
continues
to
work
towards
improving
its
risk
management
measures
in
connection
with
credit and residual value risks.
Toyota
Motor
Credit
Corporation
is
Toyota’s
principal
financial
services
subsidiary
in
the
United
States.
Toyota
also
provides
financial
services
in
41
other
countries
and
regions
through
various
financial
services
subsidiaries, including:
Toyota Finance
Corporation in Japan;
Toyota Credit
Canada Inc. in Canada;
Toyota Finance
Australia Ltd. in Australia;
Toyota Kreditbank
GmbH in Germany;
Toyota Financial
Services (UK) PLC in the United Kingdom;
29
Toyota Leasing
(Thailand) Co., Ltd. in Thailand; and
Toyota Motor
Finance (China) Co., Ltd. in China.
Toyota
Motor
Credit
Corporation
provides
a
wide
range
of
financial
services,
including
retail
financing,
retail
leasing,
wholesale
financing
and
insurance.
Toyota
Finance
Corporation
also
provides
a
range
of
financial
services,
including
retail
financing,
retail
leasing
and
credit
cards.
Toyota’s
other
finance
subsidiaries
provide
services including retail
financing, retail leasing
and wholesale financing.
The KINTO subscription
service, which
started
in
Japan in
2019 in
response to
the shift
from
“owning” cars
to
“using”
cars,
has
been
steadily
enhancing
its
service
lineup
and
gaining
brand
awareness.
In
Europe,
full
service
leasing
is
being
made
available
in
wider
areas.
Furthermore,
Toyota
developed
and
provides
customers
with
the
payment
application
“TOYOTA
Wallet”
as
a
platform
that
contributes
to
improving
the
convenience
of
customers’ daily payments and
creating a foundation for a mobility
society.
Finance
receivables
for
all
of
Toyota’s
dealer
and
customer
financing
operations
were
¥21,764.4
billion
as
of
March
31,
2022,
representing
an
increase
of
13.3%
as
compared
to
the
previous
year.
The
majority
of
Toyota’s
financial
services
are
provided
in
North
America.
As
of
March
31,
2022,
55.0%
of
Toyota’s
finance
receivables
were
derived
from
financing
operations
in
North
America,
13.3%
from
Europe,
12.9%
from
Asia,
7.3% from Japan and 11.5% from other
areas.
Approximately
40%
of
Toyota’s
unit
sales
in
the
United
States
during
fiscal
2022
included
a
finance
or
lease
arrangement
with
Toyota.
Because
the
majority
of
Toyota’s
financial
services
operations
are
related
to
the
sale
of
Toyota
vehicles,
a
decrease
in
vehicle
unit
sales
may
lead
to
a
contraction
of
Toyota’s
financial
services
operations.
The
worldwide
financial
services
market
is
highly
competitive.
Toyota’s
competitors
in
retail
financing
and
retail leasing
include
commercial
banks,
credit
unions
and other
finance
companies. Commercial
banks
and other
automobile
finance
subsidiary
companies
serving
their
parent
automobile
companies
are
competitors
of
Toyota’s
wholesale
financing
activities.
Competitors
in
Toyota’s
insurance
operations
are
primarily
national
and
regional
insurance companies.
For
information
on
Toyota’s
finance
receivables
and
operating
leases,
please
see
“Operating
and
Financial
Review and Prospects — Operating Results — Financial
Services Operations.”
Retail
Financing
Toyota’s
finance
subsidiaries
acquire
new
and
used
vehicle
installment
contracts
primarily
from
Toyota
dealers.
Installment
contracts
acquired
must
first
meet
specified
credit
standards.
Thereafter,
the
finance
company
retains
responsibility
for
installment
payment
collections
and
administration.
Toyota’s
finance
subsidiaries
acquire
security
interests
in
the
vehicles
financed
and
can
generally
repossess
vehicles
if
customers
fail
to meet
their
contractual
obligations.
Almost all
retail
financings
are
non-recourse,
which
relieves
the dealers
from
financial
responsibility
in
the
event
of
repossession.
In
most
cases,
Toyota’s
finance
subsidiaries
require
their
retail
financing
customers
to
carry
automobile
insurance
on
financed
vehicles
covering
the
interests
of
both
the finance company and the customer.
Toyota has historically
sponsored, and continues
to sponsor, special lease
and retail programs by subsidizing
below market lease and retail
contract rates.
Retail
Leasing
In
the
area
of
retail
leasing,
Toyota’s
finance
subsidiaries
acquire
new
vehicle
lease
contracts
originated
primarily
through
Toyota
dealers.
Lease
contracts
acquired
must
first
meet
specified
credit
standards
after
which
30
the
finance
company
assumes
ownership
of
the
leased
vehicle.
The
finance
company
is
generally
permitted
to
take
possession
of
the
vehicle
upon
a
default
by
the
lessee.
Toyota’s
finance
subsidiaries
are
responsible
for
contract
collection
and
administration
during
the
lease
period.
The
residual
value
is
normally
estimated
at
the
time
the
vehicle
is
first
leased.
Vehicles
returned
to
the
finance
subsidiaries
at
the
end
of
their
leases
are
sold
by
auction.
For
example,
in
the
United
States,
vehicles
are
sold
through
a
network
of
auction
sites,
as
well
as
through
the
Internet.
In
most
cases,
Toyota’s
finance
subsidiaries
require
lessees
to
carry
automobile
insurance
on leased vehicles covering the interests
of both the finance company
and the lessee.
Wholesale
Financing
Toyota’s
finance
subsidiaries
also
provide
wholesale
financing
primarily
to
qualified
Toyota
dealers
to
finance
inventories
of
new
Toyota
vehicles
and
used
vehicles
of
Toyota
and
others.
The
finance
companies
acquire
security
interests
in
vehicles
financed
at
wholesale.
In
cases
where
additional
security
interests
would
be
required,
the
finance
companies
take
dealership
assets
or
personal
assets,
or
both,
as
additional
security.
If
a
dealer defaults, the finance
companies have the right to liquidate
any assets acquired and seek
legal remedies.
Toyota’s
finance
subsidiaries
also
make
term
loans
to
dealers
for
business
acquisitions,
facilities
refurbishment,
real
estate
purchases
and
working
capital
requirements.
These
loans
are
typically
secured
with
liens on real estate, other
dealership assets and/or personal
assets of the dealers.
Insurance
Toyota
provides
insurance
services
in
the
United
States
through
Toyota
Motor
Credit
Corporation’s
wholly
owned
subsidiary,
Toyota
Motor
Insurance
Services,
Inc.
(“TMIS”)
and
its
wholly
owned
insurance
company
subsidiaries.
Their
principal
activities
include
marketing,
underwriting
and
claims
administration.
TMIS
also
provides
coverage
related
to
vehicle
service
agreements
through
Toyota
dealers
to
customers.
In
addition,
TMIS
also
provides
coverage
and
related
administrative
services
to
affiliated
companies
of
Toyota
Motor
Credit
Corporation. Toyota dealers in Japan and in
other countries and regions also engage
in vehicle insurance sales.
Other
Financial
Services
Toyota
Finance
Corporation
launched
its
credit
card
business
in
April
2001
and
began
issuing
Lexus
credit
cards in 2005 when
the Lexus brand was introduced
in Japan. As of March 31, 2022, Toyota Finance Corporation
has 15.3 million card holders (including
Lexus credit card holders).
All
Other
Operations
In
addition
to
its
automotive
operations
and
financial
services
operations,
Toyota
is
involved
in
a
number
of
other
non-automotive
business
activities.
Sales
revenues
for
these
activities
totaled
¥1,129.8
billion
in
fiscal
2022, ¥1,052.3 billion in fiscal 2021, and ¥1,504.9 billion
in fiscal 2020.
Governmental
Regulation,
Environmental
and
Safety
Standards
Toyota
is
inevitably
required
to
comply
with
the
regulations
applied
to
its
products
relating
to
the
emission
levels,
fuel
economy,
noise,
safety
and
so
on.
In
addition,
Toyota
is
subject
to
laws
in
various
jurisdictions
regulating the
levels of
pollutants generated
by its plants.
Toyota has incurred
significant
costs in complying
with
these
laws
and
regulations
and
expects
to
incur
significant
compliance
costs
in
the
future.
Toyota’s
management
views leadership in environmental
protection as an important
competitive factor in the
marketplace.
International
Harmonization
of
Vehicle
Regulations
The
World
Forum
for
Harmonization
of
Vehicle
Regulations
(“WP.29”)
of
the
United
Nations
Economic
Commission
for
Europe
(“UNECE”)
has
developed
certain
international
rules
and
regulations
such
as
the
UN
31
Regulations
(“UNR”)
under
the
1958
Agreement
and
the
Global
Technical
Regulations
(“GTR”)
under
the
1998
Agreement
and
has
been
working
to
promote
international
harmonization
of
the
technical
prescriptions
for
the
construction
and
approval
of
wheeled
vehicles.
The
UNR
has
been
adopted
in
jurisdictions
such
as
Japan,
EU
and
Russia,
and
each
participating
party’s
type
approvals
are
mutually
recognized
under
the
1958
Agreement.
The parties to
the 1998 Agreement
include the U.S., China
and India in
addition to Japan,
the EU and Russia, and
22
Global
Technical
Regulations
have
been
established
to
date.
As
the
progress
of
the
international
harmonization of
technical prescriptions
will
lead to the
reduction of the
variations in
product specifications
from
country to country, it is expected to
lead to greater efficiency
in Toyota’s product development.
Vehicle
Emissions
Japanese
Standards
The Air
Pollution
Control Act
of
Japan and the
Road Transport
Vehicle
Act and the
Act Concerning
Special
Measures
for
Total
Emission
Reduction
of
Nitrogen
Oxides
and
Particulate
Matter
from
Automobiles
in
Specified
Areas
regulate
vehicle
emissions
in
Japan.
In
recent
years,
in
addition
to
the
strengthened
regulations
on
particulate
matters
emitted
from
gasoline-fueled
vehicles,
as
can
be
seen
from
the
adoption
of
the
Worldwide
Harmonized
Light
Vehicles
Test
Cycle
(“WLTC”)
driving
cycles
and
the
introduction
of
the
Real
Driving
Emission
(“RDE”),
more
stringent
regulations
have
been
decided
to
be
introduced
to
match
the
European
Standards.
Moreover,
both
the
Noise
Regulation
Act
and
the
Road
Transport
Vehicle
Act
provide
for
noise
reduction standards on automobiles
in Japan.
U.S.
Federal
Standards
The federal Clean
Air Act directs
the Environmental
Protection Agency (“EPA”)
to establish and enforce
air
quality
standards,
including
emission
control
standards
on
passenger
vehicles,
light-duty
trucks
and
heavy-duty
vehicles.
Manufacturers
are
not
permitted
to
sell
vehicles
in
the
United
States
that
do
not
meet
the
standards.
In
March
2014,
the
EPA
finalized
new
“Tier
3”
tailpipe
emission
and
evaporative
emission
standards
for
passenger
vehicles,
light-duty
trucks,
medium-duty
passenger
vehicles
and
some
heavy-duty
vehicles.
Under
the
rule,
tailpipe
emission
standards
for
volatile
organic
compounds,
carbon
monoxide,
nitrogen
oxides,
and
particulate
matter,
as
well
as
standards
for
evaporative
emissions
and
guaranteed
useful
life
(which
relates
to
a
vehicle’s
ability to meet
emission limits
over time),
would become increasingly
stringent in phases from
2017 to 2025. The
rule would bring federal emission
standards for these pollutants
in line with California’s
emission standards.
The new Tier 3 rule also required reductions
in gasoline’s sulfur content
beginning in 2017.
California
Standards
Under
the
federal
Clean
Air
Act,
the
State
of
California
has
been
permitted
to
establish
its
own
vehicle
emission
control
standards
if
it
receives
a
waiver
from
the
EPA
that
allows
the
California
standards
to
preempt
less-stringent
federal
standards.
The
EPA
granted
such
a
preemption
waiver
to
California
in
January
2013.
The
waiver provides a legal basis for
California’s Advanced Clean Cars (“ACC”) program.
In
January
2012,
the
California
Air
Resources
Board
(“CARB”)
adopted
the
ACC
program.
The
ACC
program,
developed
in
coordination
with
the
EPA
and
the
federal
National
Highway
Traffic
Safety
Administration
(“NHTSA”),
includes
Low-Emission
Vehicle
(“LEV”)
regulations,
known
as
the
LEV
III
regulations,
that
reduce
emissions
of
smog-causing
pollutants
(volatile
organic
compounds,
carbon
monoxide,
nitrogen oxides
and particulate
matter)
and greenhouse
gases from passenger
cars and
light-duty trucks
for model
years
2015
to
2025.
The
regulations
include
standards
for
evaporative
emissions
and
guaranteed
useful
life
as
well.
The
ACC
program
also
includes
a
mandate
for
zero-emission
vehicles.
Pursuant
to
the
mandate,
CARB
requires that
a
specified
percentage
of a
manufacturer’s
passenger
cars
and
light-duty
trucks
sold in
California
be
32
“zero-emission
vehicles”
(vehicles
producing
no
emissions
of
regulated
pollutants)
(“ZEV”),
as
well
as
permits
certain
advanced
technology
vehicles
such
as
PHEVs,
and
alternative
fuel
vehicles
that
meet
“partial
zero-emission
vehicles
requirements,”
to
be
granted
partial
qualification
as
BEVs
or
FCEVs.
Toyota’s
MIRAI
qualifies as a
zero-emission vehicle.
The current
Prius Prime has
been certified
as a partial zero-emission
vehicle.
Toyota
intends
to
continue
to
develop
additional
advanced
technologies
and
alternative
fuel
technologies
that
will allow other vehicles to qualify
as zero-emission vehicles
or partial-zero-emission
vehicles.
The
Advanced
Clean
Cars
II
(“ACC
II”)
regulations
will
go
before
the
CARB
on
June
9,
2022.
ACC
II
includes
LEV
IV
regulations
that
would
further
reduce
emissions
from
light-
and
medium-duty
vehicles,
and
an
expanded mandate that
would increase the
percentage of ZEV vehicles that manufacturers
must sell in California.
The new LEV IV regulations and expanded ZEV mandate would apply to model years
2026 – 2035.
California
has adopted
regulations
that
require that
On-Board Diagnostics
(“OBD”)
systems be
incorporated
into
the
computers
of
vehicles
sold
in
California.
OBD
systems
monitor
components
that
can
affect
the
emission
performance
of
a
vehicle
and,
if
a
problem
with
a
component
is
detected,
illuminates
a
warning
light
on
the
vehicle’s
instrument
panel.
The
systems
also
store
the
malfunction
information
in
the
computer
to
facilitate
repairs. California’s OBD regulations
are the most stringent in
the world.
Other
States’
Standards
Seventeen
states
(Colorado,
Connecticut,
Delaware,
Maine,
Maryland,
Massachusetts,
Minnesota,
New
Jersey,
New
Mexico,
New
York,
Nevada,
Oregon,
Pennsylvania,
Rhode
Island,
Vermont,
Virginia
and
Washington)
have
adopted
regulations
substantially
similar
to
California’s
low-emission
vehicle
requirement,
and 15 of these have adopted California’s
zero-emission vehicle requirement.
Canadian
Standards
Canada
has
finalized
vehicle
emission
standards
equivalent
to
the
federal
standards
in
the
United
States
in
October
2014,
in
response
to
the
strengthening
of
the
federal
vehicle
emission
standards
in
the
United
States
applicable
to
model
years
2017
to
2025.
Furthermore,
certain
Canadian
provinces
are
currently
considering
enacting their
own
regulations. On
January 11,
2018, the
Ministry of
Sustainable
Development, Environment
and
the
Fight
against
Climate
Change
of
the
Province
of
Quebec
issued
regulations
on
zero-emission
vehicles
including
BEVs,
FCVs
and
PHEVs,
among
others.
In
November
2018,
the
premier
of
British
Columbia
announced
that
the
government
would
introduce
legislation
concerning
zero-emission
vehicles
(indicating
the
phase-in
introduction
starting
from
model
year
2020).
Canada
also
adopted
a
more
stringent
fuel
rule,
which
is
based
on
the
fuel
rule
in
the
United
States,
that
reduces
refineries’
annual
average
sulfur
concentration
of
gasoline to 10mg/kg from 2017 with a new addition
of credit system to secure
compliance.
European
Standards
In
2007,
the
European
Parliament
adopted
more
stringent
emission
standards
for
passenger
vehicles
and
light
commercial
vehicles.
The
effective
date
for
phasing
in
these
stricter
standards
for
passenger
vehicles
was
September 2014 for Euro 6. For light commercial
vehicles, the effective
date was September 2015 for Euro 6.
The primary focus
of Euro 6 is
to limit
further emissions
of diesel-powered
vehicles and bring
them down to
a
level
equivalent
to
gasoline-powered
vehicles.
The
EU
is
now
implementing
the
RDE
regulations,
which
require
manufacturers
to
conduct
on-road
emissions
tests
using
portable
emissions
testers
to
demonstrate
compliance.
Since
September
2017,
manufacturers
have
been
required
to
reduce
the
divergence
between
the
regulatory
limit
tested
in
laboratory
conditions
and
the
values
of
RDE
tests,
and
this
divergence
factor
was
made
more
stringent
for
all
new
vehicles
effective
January
2021.
The
EU
is
now
also
implementing
the
Worldwide
harmonized
Light
vehicles
Test
Procedure
(“WLTP”),
which
was
introduced
on
September
1,
2017.
The
OBD
regulations
have
also
been
tightened
in
terms
of
both
subject
parts
and
regulatory
values.
Effective
January
1,
2019,
the
EU
implemented
an
improved
WLTP
that
purports
to
eliminate
test
flexibilities
and
introduces
on-board fuel and energy consumption monitoring
devices.
33
Discussions
are
currently
underway
for
Euro
7,
which
will
be
more
stringent
than
Euro
6.
The
European
Commission expects to publish the Euro
7 proposed limits in the third
quarter of 2022.
Chinese
Standards
The
next-generation
emissions
regulations
for
passenger
vehicles,
or
Level
6
Emissions
Regulations
(China
6),
were
issued
as
GB18352.6-2016
at
the
end
of
2016,
pursuant
to
which
tighter
requirements
will
be
implemented
in
two
steps,
depending
on
the
regulated
subjects
and
the
implementation
timing.
Specifically,
China 6a
will
apply
to
all
models
to be
sold
or registered
in
July
2020 and
beyond,
and China
6b will
apply
to
all
models
to
be
sold
or
registered
in
July
2023
and
beyond.
China
6b
will
also
introduce
the
RDE
Regulations
adopted
under
Euro
6.
The
OBD
regulations
have
also
been
tightened
in
terms
of
both
subject
parts
and
regulatory
values. With
respect
to
fuels in
the
market,
the quality
standards
and
the
implementation
from January
2019 for China
6 gasoline
fuel
and China 6
diesel fuel
have
been provided in
GB17930-2016 and GB19147-2016
so as
to
keep
up
with
the implementation
timing of
China
6 emissions
regulations.
Moreover,
for
areas
where the
air
quality
improvement
is
an
urgent
necessity,
China
6
is
scheduled
to
be
implemented
from
July
2019
ahead
of
the
implementation
throughout
China.
Discussions
are
currently
underway
for
Level
7
Emissions
Regulations
(“China 7”), which will be more stringent
that the China 6 Emissions Regulations.
For
heavy-duty
diesel-powered
commercial
vehicles,
pursuant
to
GB17691-2005,
the
China
V
Emissions
Regulations
are
being
implemented
from
July
2017.
With
the
establishment
of
GB17691-2018,
which
provides
next-level
China
VI
Emissions
Regulations
(“China
VI”),
it
has
been
decided
that
China
VIa
will
be
implemented
from
July
2021
and
China
VIb
from
July
2023
(these
regulations
will
apply
to
gas-fueled
vehicles
and
public
vehicles
for
urban
areas
earlier
than
those
dates).
For
heavy-duty
gasoline-powered
commercial
vehicles,
pursuant
to
GB14762-2008,
Level
IV
Emissions
Regulations
(“China
IV”)
apply
to
new
models
after
July
2012.
After
the
first
day
the
regulation
is
implemented
to
a
new
model,
all
new
models
released
during
the
following
one-year
period
also
become
subject
to
the
regulation.
Tightening
of
the
next-generation
emissions
regulations
(China
V
and
China
VI)
is
currently
considered
for
heavy-duty
gasoline-powered
commercial
vehicles.
Standards
of
Other
Countries
or
Regions
In
particular,
in
India,
given
the
worsening
air
pollution,
in
December
2015,
the
Supreme
Court
banned
the
registration
of
diesel
cars
with
engines
that
are
two
liters
or
larger
in
the
National
Capital
Region,
including
the
Delhi
metropolitan
area.
In
August
2016,
the
ban
on
registration
was
lifted
on
the
condition
that
a
deposit
equal
to
1%
of
the
vehicle’s
retail
price
is
to
be
paid
to
the
Environment
Pollution
Control
Authority.
Furthermore,
the
government
accelerated
the
implementations
of
BS-6
(equivalent
to
EURO6)
to
2020.
Moreover,
Thailand
has
also decided to introduce regulations
equivalent to Euro 5 and Euro 6.
Vehicle
Fuel
Economy
Japanese
Standards
The
Act
on
Rationalizing
Energy
Use
requires
automobile
manufacturers
to
improve
their
vehicles
to
meet
specified fuel
economy
standards.
Fuel economy
standards are
established
according
to the
types of
vehicles, and
are
required
to
be
met
by
either
fiscal
2011
(April
2010-March
2011),
fiscal
2016
(April
2015-March
2016),
fiscal
2021
(April
2020-March
2021),
fiscal
2023
(April
2022-March
2023),
fiscal
2026
(April
2025-
March
2026)
or
fiscal
2031
(April
2030-March
2031).
From
2020,
if
the
WLTC
mode
is
applied
as
a
vehicle
emissions
test cycle, fuel economy test
must be also conducted based on the WLTC mode.
U.S.
Standards
The Federal
Motor
Vehicle
Information
and Cost
Savings
Act requires
automobile
manufacturers
to
comply
with
CAFE
standards.
A
manufacturer
is
subject
to
substantial
civil
penalties
if,
in
any
model
year,
its
vehicles
34
do
not
meet
the
CAFE
standards.
Manufacturers
that
exceed
the
CAFE
standards
earn
credits
determined
by
the
difference
between
the
average
fuel
economy
performance
of
their
vehicles
and
the
CAFE
standards.
Credits
earned
for
the
five
model
years
preceding
the
current
model
year,
and
credits
projected
to
be
earned
for
the
next
three model years, can be used to meet
CAFE standards in a current model year.
In
December
2011,
the
EPA
and
the
NHTSA
issued
a
joint
proposed
rule
to
further
reduce
greenhouse
gas
emissions
and
improve
fuel
economy
for
passenger
cars,
light-duty
trucks
and
medium-duty
passenger
vehicles
for
model
years
2017
through
2025.
Pursuant
to
the
rule,
which
was
finalized
in
August
2012,
these
vehicles
would
be
required
to
meet
an
estimated
combined
average
emission
level
of
163
grams
of
carbon
dioxide
per
mile in
model year
2025, equivalent
to 54.5
miles
per gallon
if these
requirements
are met through
improvements
in
fuel
economy
standards.
At
the
same
time,
the
NHTSA
issued
CAFE
standards
for
passenger
vehicles
and
light-duty
trucks
that
would
require
manufacturers
to
meet
an
estimated
combined average
fuel
economy
level
of
49.6 miles per gallon in model year
2025.
Under the Trump
Administration,
the EPA and the NHTSA proposed
less stringent
greenhouse gas emission
standards
and
CAFE
standards,
and
the
withdrawal
of
California’s
waiver
to
issue
its
own,
more
stringent
greenhouse
gas
emission
standards
under
the
LEV
III
program.
However,
under
the
Biden
Administration,
the
EPA
and
the
NHTSA
withdrew
these
proposed
greenhouse
gas
emission
standards
and
CAFE
standards,
and
in
March 2022, the EPA reinstated California’s
authority to enforce its
own greenhouse gas emissions standards.
On
December
30,
2021,
the
EPA
issued
a
final
rule
revising
passenger
car
and
light-duty
truck
greenhouse
gas
emissions
standards
for
model
years
2023
through
2026.
The
new
rule,
which
is
based
on
Presidential
Executive
Order
13990,
reduces
greenhouse
gas
emissions,
year-over-year,
by
10%
for
model
year
2023,
5%
for
2024,
6.6%
for
2025,
and
more
than
10%
for
2026.
Based
on
these
reductions,
the
industry-wide
average
emission
targets
for
passenger
cars
and
light-duty
trucks
is
projected
by
the
EPA
to
be
161
grams
of
carbon
dioxide per mile in model year
2026.
On March 31, 2022, the
NHTSA issued a final rule revising passenger
car and light-duty truck fuel
economy
standards
for
model
years
2024
through
2026.
As
with
the
EPA’s
greenhouse
gas
emission
rule,
this
new
rule
is
based
on
Presidential
Executive
Order
13990.
The
new
rule
establishes
standards
that
would
require
an
industry-
wide
fleet
of
approximately
49
mpg
for
passenger
cars
and
light
duty
trucks
in
model
year
2026.
This
is
to
be
achieved
by
increasing
fuel
efficiency,
year-over-year,
by
8
%
for
model
year
2024,
8%
for
2025,
and
10%
for
2026.
European
Standards
In
the
EU,
the
average
carbon
dioxide
emissions
limit
for
light
commercial
vehicles
is
currently
147
grams
per kilometer
and for passenger
vehicles 95 grams per kilometer.
Manufacturers failing
to meet their targets
incur
penalties
of
95
from
the
first
gram
of
exceedance
onwards
in
2019
and
beyond.
Starting
in
2021,
these
emissions targets are tested
using the WLTP.
In
April
2019,
the
European
Parliament
and
the
Council
adopted
new
carbon
dioxide
standards
for
vehicles
and
light
commercial
vehicles
for
the
period
after
2020.
Average
emissions
of
the
EU
fleet
of
new
vehicles
and
light
commercial
vehicles
in
2025
must
be
15%
lower
than
in
2021,
and
by
2030,
emissions
must
be
reduced
further
to
37.5%
and
31%
of
2021
levels
for
vehicles
and
light
commercial
vehicles,
respectively.
From
2025,
a
crediting
system
will
be
introduced
to
relax
a manufacturer’s
specific
carbon
dioxide
emissions
targets
where
the
manufacturer produces numbers
of “zero and low-emission vehicles”
above specified benchmarks.
To
achieve
a
climate-neutral
EU
by
2050
and
an
intermediate
target
of
at
least
55%
net
reduction
in
greenhouse gas
emissions by
2030, the
European Commission
proposed
in July 2021 substantially
more stringent
carbon
dioxide
emissions
targets
for
vehicles
and
light
commercial
vehicles,
as
part
of
its
“Fit
for
55”
package.
The
proposal
strengthens
the
2030
targets
from
37.5%
to
a
55%
reduction
for
new
passenger
cars
and
from
31%
35
to
a
50%
reduction
for
new
light
commercial
vehicles,
both
relative
to
the
2021
baseline
discussed
above.
In
addition,
the
proposal
introduces
a
new
2035
carbon
dioxide
target
set
at
a
100%
reduction
for
new
vehicles
and
vans,
again
relative
to
the
2021
baseline.
The
2025
target
remains
unchanged
at
a
15%
reduction
for
both
new
vehicles and vans. The proposal has not yet been
finalized.
An
EU
directive
on
motor
vehicle
air
conditioning
units
requires
manufacturers
to
replace
the
refrigerants
with that having a lower global warming impact
for all newly registered
vehicles starting in January
2017.
Chinese
Standards
Fuel
consumption
regulations
are
being
implemented
pursuant
to
the
Chinese
National
Standards
(“GB”),
and
the
manufacture
and
sale
of
vehicle
models
not
meeting
these
regulations
are
prohibited.
For
light-duty
passenger
vehicles,
GB27999-2011
was
issued.
In
these
Level
3
Fuel
Consumption
Regulations
for
passenger
cars,
the
regulation
framework
was
substantially
revised,
such
as
the
introduction
of
new
regulations
requiring
automobile
manufacturers
to
meet
standards
of
corporate
average
fuel
consumption
across
models
in
addition
to
existing
regulations
requiring
each
model
to
meet
consumption
standards.
Furthermore,
in
order
to
achieve
the
national
target
for
average
fuel
efficiency
for
2020,
the
following
more
stringent
fuel
consumption
regulations
have been enacted
and
enforced. First,
GB19578-2014, which has been
enacted to strengthen
regulations
for each
model,
is
being
applied
to
new
models
after
January
2016.
Second,
GB27999-2019,
which
has
been
enacted
as
Level
5
Fuel
Consumption
Regulations
for
passenger
vehicles
to
strengthen
corporate
average
regulations,
has
been
in
effect
since
2021.
In
addition,
Level
5
Fuel
Consumption
Regulations
for
passenger
vehicles
are
being
examined
as
more
stringent
next-generation
fuel
consumption
regulations.
For
light-duty
commercial
vehicles,
GB20997-2015
was
enacted,
which
further
applied
Level
3
Fuel
Consumption
Regulations
to
all
new
vehicles
from
January
2018
and
is
currently
being
enforced.
Moreover,
the
implementation
of
the
Life
Cycle
Assessment
(LCA),
which
comprehensively
regulates
the
amount
of
carbon
dioxide
emitted
during
the
vehicle
manufacturing,
use,
and
disposal
processes,
among
others,
is
being
considered
earlier
than
in
the
rest
of
the
world.
With
respect
to
large
commercial
vehicles,
pursuant
to
GB30510-2018,
Level
3
Fuel
Consumption
Regulations
apply
to
new
vehicles
from
July
2019
and
are
currently
being
enforced.
In
addition,
in
an
effort
to
further
strengthen
fuel
consumption
regulations
for
the
next
generation,
Level
4
Fuel
Consumption
Regulations
are currently being considered.
Vehicle
Safety
Japanese
Standards
Japan
has
been
participating
in
the
1958
Agreement
of
the
UN
and
has
a
number
of
technical
standards
that
are harmonized with the UN Regulations.
Furthermore,
unique to
Japan,
the safety
standards
for
automated
driving
systems were
established
in March
2020,
requiring,
in
addition
to
a
certain
level
of
performance
of
automated
driving
system,
the
installation
of
an
event
data
recorder
and
cyber
security
measures
against
unauthorized
access.
In
addition,
a
certification
program
was
introduced
in
April
2020
with
respect
to
the
system
to
control
sudden
acceleration
by
mixing
up
the
gas
and
brake pedals as well as the collision
damage mitigation brake
system.
In
addition,
fuel-cell
vehicles
using
compressed
hydrogen
are
subject
to
the
approval
and
control
under
the
High Pressure Gas Safety Act in addition to the
Road Vehicles Act.
U.S.
Standards
In
the
U.S.,
in
light
of
the
Executive
Order
issued
by
President
Trump
on
January
30,
2017,
few
safety
standards providing
new technical
requirements
have been
issued.
With respect
to automated
driving
vehicles, on
36
January
8,
2020
the
Trump
Administration
and
the
U.S.
Department
of
Transportation
released
Ensuring
American
Leadership
in
Automated
Vehicle
Technologies:
Automated
Vehicles
4.0
(“AV
4.0”).
AV
4.0
unified
efforts
across
38
Federal
departments,
independent
agencies,
commissions,
and Presidential
Executive
Offices
in
providing
high
level
guidance
to
state
and
local
governments
and
other
stakeholders.
AV
4.0
also
established
Federal
principles
for
the
development
and
integration
of
automated
vehicles.
California
and
many
other
states,
despite
AV
4.0,
have
adopted
different
approval
systems
so
that
automated
vehicles
must
be
compliant
with
regulations
and
systems
that
vary
from
state
to
state.
On
December
23,
2020,
California
issued
its
first
autonomous vehicle deployment permit.
European
Standards
In
December
2019,
the
EU
issued
the
revised
General
Safety
Regulation
to
tighten
the
requirements
concerning
safety
and
the
protection
of vehicle
occupants
and
vulnerable
road
users.
This revised
General Safety
Regulation
will
make
certain
vehicle
safety
equipment
mandatory
in
stages
starting
2022,
including:
advanced
emergency
braking,
emergency
lane
keeping
systems,
driver
drowsiness
and
attention
warning,
intelligent
speed
assistance,
reversing
detection
systems,
tire
pressure
monitoring
systems,
and
data
recorders
in
case
of
an
accident
(“event
data
recorders”).
In
relation
to
this,
various
UN
Regulations
were
developed,
and
for
the
equipment for which UN Regulations have not been developed,
the EU established its own technical
standards.
Furthermore,
a
major
overhaul
of
the
EU-type
approval
framework
for
motor
vehicles
was
issued
in
May
2018.
The
new
regulation
purports
to
raise
the
quality
and
independency
of
vehicle
type-approval
and
testing,
to
increase checks
of
vehicles that
are
already on
the EU market,
and
to strengthen
European Commission
oversight
of
the
framework.
It
became
mandatory
for
all
new
vehicle
models
as
of
September
1,
2020.
Automated
driving
vehicles must obtain exemption
under this framework.
United
Nations
Standards
The
United
Nations
restructured
the
existing
working
parties
and
established
the
Working
Party
on
Automated/Autonomous
and
Connected
Vehicles
(“GRVA”)
that
is
dedicated
to
the
development
of
regulations
on
automated
driving.
The
GRVA
is
developing
regulations
covering
functional
safety
requirements,
new
evaluation
test
method
requirements,
cybersecurity,
software
updates,
data
recording
for
automated
driving
vehicles
and
data
recording
in
case
of
an
accident.
The
new
regulations
on
cyber
security,
software
updates
and
automated lane keeping system came
into effect in January 2021.
Chinese
Standards
Vehicle
safety
regulations
in
China
were
in
general
established
having
regard
to
the
UN
regulations.
However,
China’s
own
national
technical
standards
on
functions
such
as
batteries,
motors,
and
the
charging
and
remote
surveillance
of
BEVs
have
been
made
mandatory.
Fuel-cell
vehicles
are
subject
to
the
supervising
regulations
on
the
safety
of
high
pressure
gas
in
addition
to
the
vehicle
type
approval
requirement.
Moreover,
in
accordance
with
the
Made
in
China
2025
policy,
more
than
100
standards
for
intelligent
connected
vehicles
(“ICV”) are being developed (including
automation, telecommunication
and security).
Environmental
Matters
Japanese
Standards
Automotive
operations
in
Japan
are
subject
to
substantial
environmental
regulation
under
laws
such
as
the
Air
Pollution
Control
Act,
the
Water
Pollution
Prevention
Act,
the
Noise
Regulation
Act
and
the
Vibration
Control Act. Under these
laws, if a business entity establishes
or alters any facility
that is regulated by these
laws,
the
business
entity
is
required
to give
prior
notice
to
regulators,
and
if
a
business
entity
discharges,
uses
or
stores
substances
that
are
environmental
burdens
or
causes
noise
or
vibration
from
such
facility,
the
business
entity
is
37
also required
to
comply
with the
applicable
standards.
Toyota
is subject
to local
regulations,
which in
some cases
impose
more
stringent
obligations
than
the
Japanese
central
government
requirements.
Under
the
Waste
Management
and
Public
Cleansing
Act,
producers
of
industrial
waste
must
dispose
of
industrial
waste
in
the
manner prescribed in the same
act.
The
Soil
Contamination
Countermeasures
Act
of
Japan
requires
that
landowners
conduct
contamination
testing and
submit a
report at
the time
they
cease to
use hazardous
substances, such as
in connection with
the sale
of
a
former
factory,
or
if
there
is
a
possibility
of
health
hazards
due to
land
contamination.
If
it
is
found
that
land
contamination
exceeds
a
certain
level,
the
relevant
prefectural
authority
designates
the
area
as
considered
to
be
contaminated,
orders
the
landowner
to
submit
a
plan
for
decontamination
(such
plan
must
describe
the
measures
to
be
taken
in
the
area,
the
reasons
therefor,
and
the
deadline
for
implementing
such
measures,
etc.),
and
has
the
landowner
take
such
measures
in
accordance
with
such
plan.
In
addition,
under
the
Act
on
Recycling,
etc.
of
End-of-Life
Vehicles,
vehicle
manufacturers
are
required
to
take
back
and
recycle
specified
materials
(automotive
shredder
residues,
air
bags
and
fluorocarbons)
of
end-of-life
vehicles
and
the
provisions
concerning
such
obligations
of
vehicle
manufacturers
became
effective
in
January
2005.
Toyota
has
coordinated
with
relevant
parties
to
establish
a
vehicle
take-back
and
recycle
system
throughout
Japan.
As
a
result,
in
fiscal
2021,
Toyota
achieved
a
recycling/recovery
rate
of
96%
for
automobile
shredder
residue
(the
legal
requirement
being
70%) and 95% for air bags (the legal
requirement being 85%) and reached
the targets set forth
in this law.
U.S.
Standards
The environmental
regulations
applicable
in
the
United
States
include,
among
others,
the
Clean
Air
Act, the
Clean
Water
Act,
the
Resource
Conservation
and
Recovery
Act,
the
Pollution
Prevention
Act
of
1990
and
the
Toxic
Substances
Control
Act.
Toyota
is
subject
to
a
variety
of
state
legislation
that
parallels,
and
in
some
cases
imposes more stringent obligations
than, federal requirements.
Pursuant
to
the
Clean
Air
Act,
the
EPA
has
promulgated
National
Ambient
Air
Quality
Standards
(“NAAQS”)
for
six
“criteria”
pollutants,
including
for
ozone
and
particulate
matter.
The
Clean
Air
Act
requires
that
the
EPA
review
and
possibly
revise
these
NAAQS
every
five
years.
In
2012,
the
EPA
made
the
annual
health-based
particulate
matter
NAAQS
more
stringent.
In
2015,
the
EPA
made
the
annual
health-based
and
welfare-based
ozone
NAAQS
more
stringent.
On
June
10,
2021,
the
EPA
announced
that
it
would
reconsider
a
December
7,
2020
decision
to
retain
the
2012
annual
health-based
particulate
matter
NAAQS
without
changes,
which might
result
in
a tightening
of
the
standards. The
2012 annual
health-based particulate
matter
NAAQS, the
2015
annual
health-based
and
welfare-based
ozone
NAAQS,
as
well
as
any
future
NAAQS
revisions,
could
lead
to additional pollution control
requirements on the industry,
including on Toyota’s manufacturing
operations.
European
Standards
In
the
EU,
the
Ambient
Air
Quality
and
Clearer
Air
for
Europe
Directive
(Directive
2008/50/EC)
sets
the
environmental
standards
for
air
quality.
In
relation
to
this,
environmental
regulations,
such
as
the
National
Emissions
Ceilings
Directive,
or
NEC
Directive
(2016/2284/EU),
the
Industrial
Emissions
Directive,
or
IED
Directive
(2010/75/EU),
and
Directive
2007/46/EC,
which
is
intended
to
control
on-road
emission
sources,
have
been established, and emissions are
managed under these directives
based on their source.
The
European
Commission
is
currently
reviewing
the
EU
Directive
on
End-of-Life
Vehicles
with
a
public
consultation
process.
The
Commission
expects
to
present
a
legislative
proposal
for
revisions
to
this
directive
in
2022.
Toyota
strives
to
ensure
that
its
operations
are
in
compliance
with
environmental
regulatory
requirements
concerning
its
facilities
and
products
in
each
of
the
markets
in
which
it
operates.
Toyota
continuously
monitors
these
requirements
and
takes
necessary
operational
measures
in
an
effort
to
ensure
that
it
remains
in
material
compliance
with
all
of
these
requirements.
However,
compliance
with
environmental
regulations
and
standards
38
has
increased
costs
and
is
expected
to
lead
to
higher
costs
in
the
future.
Therefore,
Toyota
recognizes
that
effective
environmental
cost
management
will
become
increasingly
important.
Moreover,
innovation
and
leadership
in
the
area
of
environmental
protection
are
becoming
increasingly
important
to
remain
competitive
in
the
market.
As
a
result,
Toyota
has
proceeded
with
the
development
and
production
of
environmentally
friendly
technologies,
such
as
hybrid
electric
vehicles,
PHEVs,
FCEVs,
BEVs
and
high
fuel
efficiency,
low
emission
engines.
In
addressing
environmental
issues,
based
on
an
assessment
of
the
environmental
impact
of
its
products
through their
entire life
cycles,
from
production
through
sales, disposal
and
recycling,
Toyota,
as a
manufacturer,
strives
to
take
all
possible
measures
from
development
stage
and
continues
to
work
towards
technological
innovations to make efficient
use of resources and to reduce the
burden on the environment.
Disclosure
of
Iranian
Activities
under
Section
13(r)
of
the
Securities
Exchange
Act
of
1934
Section
219
of
the
Iran
Threat
Reduction
and
Syria
Human
Rights
Act
of
2012
added
Section
13(r)
to
the
Securities
Exchange
Act
of
1934,
as
amended.
Section
13(r)
requires
an
issuer
to
disclose
in
its
annual
or
quarterly
reports,
as
applicable,
whether
it
or
any
of
its
affiliates
knowingly
engaged
in
certain
activities,
transactions
or
dealings
relating
to
Iran
or
with
designated
natural
persons
or
entities
involved
in
terrorism
or
the
proliferation
of
weapons
of
mass
destruction.
Pursuant
to
Section
13(r),
Toyota
is
disclosing
the
following
information.
During
the
fiscal
year
ended
March
31,
2022,
TMT
performed
maintenance
services
on
Toyota
vehicles
owned by the Iranian embassy in Japan.
This activity
contributed
an insignificant
amount
of gross
revenues and
net profit
to Toyota. Toyota
believes
that
none
of
the
above
transactions
subject
it
or
its
affiliates
to
U.S.
sanctions.
TMT
intends
to
cease
conducting
its activities
described
above,
except
that
it
intends
to
provide to
the
Iranian
embassy
necessary
repair services
in
case of a recall or other safety
measures in accordance with
applicable laws and regulations.
Research
and
Development
The
overriding
goals
of
Toyota’s
technology
and
product
development
activities
are
to
minimize
the
negative
aspects
of
vehicles,
such
as
traffic
accidents
and
impact
on
the
environment,
and
maximize
the
positive
aspects,
such
as
driving
pleasure,
comfort
and
convenience.
By
achieving
these
sometimes
conflicting
goals
to
a
high degree, Toyota seeks
to open the
door to the
automobile society of the
future. To ensure efficient
progress in
research
and
development
activities,
Toyota
coordinates
and
integrates
all
research
and
development
phases,
from
basic
research
and
advanced
research
to
forward-looking
technology
and
product
development.
With
respect
to
long-term
basic
research
in
areas
such
as
energy,
the
environment,
information
technology,
telecommunications
and
materials,
projects
are
regularly
reviewed
and
evaluated
in
consultation
with
outside
experts
to
achieve
research
and
development
cost
control.
With
respect
to
forward-looking,
leading-edge
technology
and
product
development,
Toyota
establishes
cost-performance
benchmarks
on
a
project-by-project
basis to ensure efficient development
investment.
The chart below provides an overview of Toyota’s R&D at
each phase.
Basic
research
Phase
to
discover
development
theme
Research on basic vehicle-related
technology
Forward-looking
and
leading-edge
technology
development
Phase
requiring
technological
breakthroughs
such
as
components
and
systems
Development
of
leading-edge
components
and
systems
that
are
more
advanced
than those of competitors
Product
development
Phase
mainly
for
development
of
new
models
Development of all-new models and existing-model
upgrades
39
With
a
focus
on
environmentally
friendly,
carbon-neutral
and
safe-vehicle
technology,
Toyota
is
promoting
research
and
development
into
the
early
commercialization
of
next
generation
environmentally
friendly,
energy-efficient
and
safe-vehicle
technology.
Toyota
is
also
moving
forward
with
the
development
of
innovative
technologies
such
as
electrification,
connected
vehicles
and
automated
driving
so
as
to
realize
a
mobility
society
of
the
future
that
enables
everyone
to
enjoy
freedom
of
movement
beyond
the
conventional
concept
of
vehicles.
To this end, Toyota is focusing on the following
areas:
further
improvements
in
hybrid
technologies,
including
in
functions
and
cost,
and
contributions
to
the
environment through advancements;
improvement
in
internal
combustion
engine
fuel
economy
technology
as
well
as
improvement
in
technology in connection with more stringent
emission standards;
development
of BEVs, FCEVs and other alternative fuel vehicles;
development
of advanced safety technology designed
to promote driving and vehicle
safety;
development
of automated driving technologies
connected
car technologies; and
development
of technology to bring about more
comfortable travel (driving).
For
a
detailed
discussion
of
the
company’s
research
and
development
infrastructure,
see
“Operating
and
Financial Review and Prospects — Research and Development,
Patents and Licenses.”
Components
and
Parts,
Raw
Materials
and
Sources
of
Supply
Toyota
purchases
parts,
components,
raw
materials,
equipment
and
other
supplies
from
multiple
competing
suppliers
located
around
the
world.
Toyota
works
closely
with
its
suppliers
to
pursue
optimal
procurement.
Toyota
believes
that
this
policy
encourages
technological
innovation,
cost
reduction
and
other
measures
to
strengthen
its
vehicle
competitiveness.
Although
there
are
supply
restrictions
with
respect
to
the
procurement
of
certain parts and components, Toyota
plans to continue purchases based on the same
principle.
Because
Toyota
had
more
than
50
overseas
operations
in
27
countries
and
regions
as
of
March
31,
2022,
procurement
of
parts
and
components
is
being
carried
out
not
only
locally
in
the
country
of
the
production
site
but
also
from
third
countries.
As
a
result,
the
distribution
network
has
become
increasingly
complex.
In
order
to
realize
timely
and
efficient
distribution
while
minimizing
costs,
Toyota
is
promoting
efforts
to
optimize
each
stage
of
the
supply
chain.
To
this
end,
Toyota
has
developed
a
standardized
system
of
global
distribution
and
is
supporting
the
operation
of
the
system
at
each
production
base.
The
use
of
the
global
distribution
system
aims
at
implementing
parts
procurement
that
meets
changes
in
vehicle
production
in
a
timely
manner.
These
varying
efforts,
combined
together,
have
led
to
maximized
customer
satisfaction,
as
well
as
to
building
a
good
working
relationship with Toyota’s suppliers.
Toyota
aims
to
share
information
and
collaborate
among
the
procurement
divisions
in
each
of
the
regions
throughout
the
world
in
order
to
procure
parts
and
materials
from
the
most
competitive
suppliers
among
Toyota
factories
located
in
various
areas
worldwide.
At
the
same
time,
Toyota
carries
out
streamlining
efforts
together
with suppliers
in
each
country in
order
to achieve
sustainable
growth. Toyota
has been
working on cost
reduction
measures,
referred
to
as
RR-CI
(ryohin-renka
cost
innovation)
and
VA
(value
analysis)
activities,
which
aims
to
eliminate
waste
in
all
processes
from
design
to
production
while
ensuring
the
reliability
and
safety
of
each
part.
Through
these
activities,
Toyota
focuses
on
“developing
a
real
cost-competitive
structure”
by
working
together
with suppliers.
In
response
to
a
significant
upward
trend
in
materials
costs,
including
related
logistics
and other
costs,
since
fiscal
2022,
Toyota
is
accelerating
initiatives
such
as
the
replacement
of
raw
materials
with
those
that
are
less
subject to price pressure and reduction
of raw material usage.
40
Intellectual
Property
Through
its
ongoing
challenge
to
be
one
step
ahead
in
conducting
new
research
and
development,
Toyota
has
enhanced
its
product
appeal
and
technological
prowess,
which
have
been
serving
as
the
source
of
the
company’s
competitiveness.
At
the
core
of
Toyota’s
products
created
through
this
research
and
development
always
lies
intellectual
property,
including
invention,
know-how
and
brands.
This
intellectual
property
functions
as
Toyota’s
important
management
resources.
By
protecting
and
utilizing
our
intellectual
property
in
an
appropriate manner, we will continue
to contribute to society.
Toward
the
realization
of
a
future
mobility
society,
Toyota
is
carrying
out
intellectual
property
activities
in
line
with
its
focus
areas.
For
example,
by
distributing
resources
mainly
to
such
areas
as
carbon
neutrality,
software and
Woven City
and enhancing
the obtainment
and use of intellectual
property
rights, we are
committed
to strengthening our future competitiveness.
As for the intellectual
property activities framework,
having established intellectual
property functions
at the
R&D
centers
in
the
United
States,
Europe
and
China,
Toyota
supports
technology
development
globally
by
securing organic, systematic
coordination between R&D activities
and intellectual
property activities. Working
in
concert with
approximately
110 law firms
around
the world,
we collect
intellectual
property information
and take
measures
suitable
for
each
country
or
region.
To
enhance
activities
that
incorporate
management,
R&D
and
intellectual
property
in
one,
Toyota
has
an
Intellectual
Property
Management
Committee.
The
members
of
the
Committee
discuss
and
make
decisions
concerning
obtaining
and
utilizing
important
intellectual
property
conducive to management and for responding
to management risks related
to intellectual property.
Toyota
holds
approximately
70,000
patents
around
the
world.
While
Toyota
considers
all
of
its
intellectual
property
to
be
important,
it
does
not
consider
any
specific
subset
of
its
patents,
trademarks,
design
patents
or
utility model
registrations
to be
so important
that
their
expiration or
termination
would materially
affect
Toyota’s
business.
In
recent
years,
Toyota
has
filed
approximately
12,000
patent
applications
a
year
domestically
and
internationally.
In 2020,
Toyota
became the
holder of
the most
patents
among the
car manufacturers
in
Japan, the
United
States
and
other
countries.
According
to
a
ranking
list
of
companies
filing
patent
applications
concerning
decarbonization-related
technologies
to
the
Japan
Patent
Office,
which
was
released
by
an
external
institution,
Toyota
has
maintained
a
top
ranking.
One
example
of
Toyota’s
utilizing
its
patents
toward
the
realization
of
carbon neutrality
is
its granting
royalty-free
licenses on
patents
for
vehicle electrification-related
technologies.
In
2019,
as
part
of
its
initiatives
for
further
promoting
the
widespread
use
of
electrified
vehicles,
Toyota
decided
to
grant
royalty-free
licenses
on
approximately
23,740
patents,
which
Toyota
holds
around
the
world,
for
vehicle
electrification-related
technologies,
including
power
control
units
and
system
controls.
These
advanced
vehicle
electrification-related
technologies
have
helped
Toyota
realize
enhanced
performance,
reduced
size
and
cost
reductions
through
over
more
than
20
years
of
HEV
development,
serving
as
core
technologies
that
can
be
applied
to
the
development
of
various
types
of
electrified
vehicles,
including
HEVs,
PHEVs,
BEVs
and
FCEVs.
In
this
way,
while
building
external
partnerships
by
sharing
technologies,
we
are
actively
involved
in
promoting
the further growth of electrified
vehicles.
41
Capital
Expenditures
and
Divestitures
Set
forth
below
is
a
chart
of
Toyota’s
principal
capital
expenditures
between
April
1,
2019
and
March
31,
2022,
the
approximate
total
costs
of
such
activity,
as
well
as
the
location
and
method
of
financing
of
such
activity,
presented
on
a
“by
subsidiary”
basis
and
as
reported
in
Toyota’s
annual
Japanese
securities
report
filed
with the director of the Kanto Local Finance
Bureau.
Description
of
Activity
Total
Cost
(Yen
in
billions)
Location
Primary
Method
of
Financing
Japan
Investment primarily in
technology and products by
Toyota Motor Corporation
........................
1,081.6
Japan
Internal funds,
financing
from issuance
of bonds, etc.
Investment primarily in
technology and products by
Daihatsu Motor Co., Ltd.
.........................
121.9
Japan
Internal
funds
Investment primarily in
technology and products by
Toyota Motor Kyushu, Inc.
.......................
107.5
Japan
Internal
funds
Investment primarily in
technology and products by
Toyota Auto Body Co., Ltd.
......................
92.3
Japan
Internal funds
Investment primarily in
technology and products by
Primearth EV Energy Co., Ltd.
....................
73.6
Japan
Internal
funds
Investment primarily in
technology and products by
Prime Planet Energy & Solutions, Inc.
..............
72.1
Japan
Internal
funds
Investment primarily in
technology and products by
Hino Motors, Ltd.
..............................
56.8
Japan
Internal
funds
Outside
of
Japan
Investment primarily to
promote localization by
Toyota Motor Manufacturing, Indiana,
Inc.
..........
199.2
United States
Internal funds
Investment primarily to
promote localization by
Toyota Motor Manufacturing Texas, Inc.
............
167.0
United States
Internal
funds
Investment primarily to
promote localization by
Toyota Motor Manufacturing Canada, Inc.
...........
91.9
Canada
Internal funds
Investment primarily to
promote localization by
Toyota Motor Europe NV/SA
.....................
85.6
Belgium
Internal funds
Investment primarily to
promote localization by
Toyota Motor Manufacturing, Northern Kentucky,
Inc.
..........................................
72.0
United States
Internal funds
Investment primarily to
promote localization by
Toyota Motor Thailand Co., Ltd.
...................
71.2
Thailand
Internal funds
Investment primarily to
promote localization by
Toyota Motor Manufacturing, Kentucky, Inc.
.........
69.6
United States
Internal
funds
Investment primarily in
leased automobiles by
Toyota Motor Credit Corporation
..................
5,596.6
United States
Internal funds,
financing
from issuance
of bonds, etc.
42
Set
forth
below
is
information
with
respect
to
Toyota’s
material
plans
to
construct,
expand
or
improve
its
facilities
between
April
2022
and
March
2023,
presented
on
a
“by
subsidiary”
basis
and
as
reported
in
Toyota’s
annual Japanese securities report
filed with the director
of the Kanto Local Finance Bureau.
Description
of
Activity
Total
Cost
(Yen
in
billions)
Location
Primary
Method
of
Financing
Japan
Investment primarily in
manufacturing facilities
by
Toyota Motor Corporation
........................
430.0
Japan
Internal
funds
Outside
of
Japan
Investment primarily in
manufacturing facilities
by
Toyota Battery Manufacturing, Inc.
................
69.8
United States
Internal funds
Investment primarily in
manufacturing facilities
by
Toyota Motor Manufacturing, Canada, Inc.
..........
66.5
Canada
Internal funds
Investment primarily in
manufacturing facilities
by
Toyota Motor Manufacturing, Kentucky, Inc.
.........
60.4
United States
Internal funds
Investment primarily in
manufacturing facilities
by
Toyota Motor Europe NV/SA
.....................
55.2
Belgium
Internal funds
Investment primarily in
manufacturing facilities
by
Toyota Kirloskar Motor Private Ltd.
................
53.2
India
Internal funds
Toyota
does
not
collect
information
on
the
amount
of
expenditures
already
paid
for
each
plant
under
construction
because
Toyota
believes
that
it
is
difficult
and
it
would
require
unreasonable
effort
or
expense
to
identify
and categorize
each expenditure
item
with
reasonable
accuracy as
past
and future
expenditures.
Toyota’s
construction
projects
consist
of
numerous
expenditures,
each
of
which is
continually
being
adjusted
and
incurred
in variable and constantly changing
amounts as part of the overall
work-in-progress.
Seasonality
Toyota does
not
consider its
seasonality
material
in
the
sense of
significantly
higher
sales
during
any certain
period of the year as compared to
other periods of the year.
Legal
Proceedings
Toyota
and
other
automakers
were
named
in
certain
class
actions
filed
in
Mexico,
Canada,
Australia,
Israel
and
Brazil
relating
to
Takata
airbag
issues.
The
actions
in
Mexico,
Israel
and
Brazil
are
being
litigated.
The
action in Australia is in the
process of resolution. The action in
Canada has been settled.
Toyota
is
named
as
a
defendant
in
an
economic
loss
class
action
lawsuit
in
Australia
in
which
damages
are
claimed
on
the
basis
that
diesel
particulate
filters
in
certain
vehicle
models
are
defective.
On
April
7,
2022,
Toyota
received
an
unfavourable
judgment
in
the
court
of
first
instance.
The
judgment
included
a
finding
that
there
was
a
perceived
reduction
in
vehicle
value
of
certain
vehicle
models.
Toyota
disagrees
with
the
judgment
and
has
filed
an
appeal.
Other
claims
of
economic
loss
in
this
class
action
lawsuit
continue
to
be
litigated
at
the
court
of
first
instance.
In
estimating
the
provision
we
should
record
in
the
consolidated
financial
statements
as
a
result
of
the
aforementioned
judgment,
Toyota
has
considered
various
factors
including
the
legal
and
factual
circumstances
of
the
case,
the
contents
of
the
judgement
of
the
court
of
first
instance,
and
the
views
of
legal
counsel.
The
currently
estimated
probable
economic
outflow
related
to
the
class
action
is
immaterial
to
Toyota’s
consolidated
financial
position,
results
of
operations
and
cash
flows.
At
this
stage,
however,
the
final
outcome
and therefore ultimate financial
liability for
Toyota on account of this matter
cannot be predicted with certainty.
As
previously
disclosed,
Toyota
entered
into
a
consent
decree
on
January
14,
2021
with
the
U.S.
EPA,
the
Department
of
Justice
(“DOJ”)
and
the
Civil
Division
of
the
U.S.
Attorney’s
Office
for
the
Southern
District
of
43
New
York
(“SDNY”)
to
resolve
investigations
stemming
from
a
self-reported
process
gap
in
fulfilling
certain
emissions
defect
information
reporting
requirements.
Under
the
consent
decree,
Toyota
agreed
to
pay,
and
has
paid, a $180 million
civil penalty and to comply
with certain additional
periodic reporting requirements.
The U.S.
District Court for the Southern District
of New York approved the consent decree on April
2, 2021.
In
April
2020,
Toyota
reported
possible
anti-bribery
violations
related
to
a
Thai
subsidiary
to
the
SEC
and
the
DOJ,
and
is
cooperating
with
their
investigations.
Investigations
by
governmental
authorities
related
to
these
matters
could
result
in
the
imposition
of
civil
or
criminal
penalties,
fines
or
other
sanctions,
or
litigation.
Toyota
cannot predict the scope, duration or
outcome of these matters
at this time.
On
March
4,
2022,
Hino
Motors,
Ltd.,
a
publicly
traded
Japanese
company
that
produces
and
sells
commercial
trucks
and
buses,
and
of
which
Toyota
owns
50.18%
of
the
voting
interests
as
of
March
31,
2022,
disclosed
that
it
had
voluntarily
commenced
an
investigation
into
potential
issues
regarding
emissions
performance and certification
in
the North American
and Japanese markets,
and that
it has reported
such issues to
and
is
cooperating
with
the
relevant
authorities,
including
the
Japanese
Ministry
of
Land,
Infrastructure,
Transport
and
Tourism
(“MLIT”)
and
the
U.S.
Department
of
Justice.
Hino
announced
that,
through
such
investigation,
it
identified
past
misconduct
in
relation
to
its
applications
for
certification
concerning
the
emissions and the
fuel economy performance
of certain of its
engines for the Japanese market.
Accordingly, Hino
disclosed
that
it
decided
to suspend
the
sale
of
such
engine
models
and
their
corresponding
vehicles
in
Japan
and
announced
on
March
25,
2022
a
recall
of
vehicles
equipped
with
one
of
the
engines.
On
March
29,
2022,
MLIT
announced
that
it
had
revoked
certain
of
the
“type
approvals”
(that
is,
approvals
that
exempt
new
vehicles
or
vehicles
with
certain
equipment
from
individual
testing
by
government
inspectors
prior
to
sale)
and
the
fuel
consumption
ratings
relating
to
such
engine
models.
Investigations
by
governmental
authorities
related
to
these
matters
could
result
in
the
imposition
of
civil
or
criminal
penalties,
fines
or
other
sanctions,
or
litigation.
Toyota
cannot predict the scope, duration, or
outcome of these matters
at this time.
Toyota
also
has
various
other
pending
legal
actions
and
claims,
including
without
limitation
personal
injury
and
wrongful
death
lawsuits
and
claims
in
the
United
States,
as
well
as
intellectual
property
litigation,
and
is
subject to government investigations
from time to time.
Beyond
the
amounts
accrued
with
respect
to
all
aforementioned
matters,
Toyota
is
unable
to
estimate
a
range of
reasonably
possible
loss, if
any,
for
the pending
legal
matters
because
(i)
many of
the proceedings
are
in
evidence
gathering
stages,
(ii)
significant
factual
issues
need
to
be
resolved,
(iii)
the
legal
theory
or
nature
of
the
claims
is
unclear,
(iv)
the
outcome
of
future
motions
or
appeals
is
unknown
and/or
(v)
the
outcomes
of
other
matters of these
types vary widely and do not appear
sufficiently similar
to offer meaningful guidance.
Therefore,
for
all
of
the
aforementioned
matters,
which
Toyota
is
in
discussions
to
resolve,
any
losses
that
are
beyond
the
amounts accrued could have an adverse effect
on Toyota’s financial position,
results of operations
or cash flows.
44
4.C
ORGANIZATIONAL
STRUCTURE
As
of
March
31,
2022,
Toyota
Motor
Corporation
had
208
Japanese
subsidiaries
and
351
overseas
subsidiaries.
The
following
table
sets
forth
for
each
of
Toyota
Motor
Corporation’s
principal
subsidiaries,
the
country
of
incorporation
and
the
percentage
ownership
interest
and
the
voting
interest
held
by
Toyota
Motor
Corporation.
Name
of
Subsidiary
Country
of
Incorporation
Percentage
Ownership
Interest
Percentage
Voting
Interest
Toyota Financial Services Corporation
..............................
Japan
100.00
100.00
Hino Motors, Ltd.
..............................................
Japan
50.11
50.18
Daihatsu Motor Co., Ltd.
.........................................
Japan
100.00
100.00
TOYOTA Mobility Tokyo Inc.
....................................
Japan
100.00
100.00
Toyota Finance Corporation
......................................
Japan
100.00
100.00
Toyota Mobility Parts Co., Ltd.
....................................
Japan
54.08
54.08
Toyota Auto Body Co., Ltd.
......................................
Japan
100.00
100.00
Toyota Motor Kyushu, Inc.
.......................................
Japan
100.00
100.00
Toyota Motor East Japan, Inc.
.....................................
Japan
100.00
100.00
Daihatsu Motor Kyushu Co., Ltd.
..................................
Japan
100.00
100.00
Cataler Corporation
.............................................
Japan
56.51
57.31
Toyota Motor Engineering & Manufacturing North America, Inc.
........
United States
100.00
100.00
Toyota Motor Manufacturing, Kentucky, Inc.
........................
United States
100.00
100.00
Toyota Motor North America, Inc.
.................................
United States
100.00
100.00
Toyota Motor Credit Corporation
..................................
United States
100.00
100.00
Toyota Motor Manufacturing, Indiana, Inc.
..........................
United States
100.00
100.00
Toyota Motor Manufacturing, Texas, Inc.
...........................
United States
100.00
100.00
Toyota Motor Sales, U.S.A., Inc.
..................................
United States
100.00
100.00
Toyota Motor Manufacturing Canada Inc.
...........................
Canada
100.00
100.00
Toyota Credit Canada Inc.
........................................
Canada
100.00
100.00
Toyota Canada Inc.
.............................................
Canada
51.00
51.00
Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V.
......
Mexico
100.00
100.00
Toyota Motor Manufacturing de Guanajuato, S.A.de C.V.
..............
Mexico
100.00
100.00
Toyota Motor Europe NV/SA
.....................................
Belgium
100.00
100.00
Toyota Motor Manufacturing France S.A.S.
..........................
France
100.00
100.00
Toyota France S.A.S
............................................
France
100.00
100.00
Toyota Motor Finance (Netherlands) B.V.
...........................
Netherlands
100.00
100.00
Toyota Motor Manufacturing (UK) Ltd.
.............................
United Kingdom
100.00
100.00
Toyota Financial Services (UK) PLC
...............................
United Kingdom
100.00
100.00
Toyota (GB) PLC
..............................................
United Kingdom
100.00
100.00
OOO “TOYOTA MOTOR”
......................................
Russia
100.00
100.00
Toyota Motor Manufacturing Turkey Inc.
...........................
Turkey
90.00
90.00
Guangqi Toyota Engine Co., Ltd.
..................................
China
70.00
70.00
Toyota Motor (China) Investment Co., Ltd.
..........................
China
100.00
100.00
Toyota Motor Finance (China) Co., Ltd.
.............................
China
100.00
100.00
Toyota Kirloskar Motor Private Ltd.
................................
India
89.00
89.00
P.T. Astra Daihatsu Motor
........................................
Indonesia
61.75
61.75
PT. Toyota Motor Manufacturing Indonesia
..........................
Indonesia
95.00
95.00
Toyota Motor Asia Pacific Pte Ltd.
.................................
Singapore
100.00
100.00
Kuozui Motors, Ltd.
............................................
Taiwan
70.00
70.00
Toyota Leasing (Thailand) Co., Ltd.
................................
Thailand
87.44
87.44
Toyota Motor Thailand Co., Ltd.
..................................
Thailand
86.43
86.43
Toyota Daihatsu Engineering & Manufacturing Co., Ltd.
...............
Thailand
100.00
100.00
Toyota Motor Corporation Australia Ltd.
............................
Australia
100.00
100.00
Toyota Finance Australia Ltd.
.....................................
Australia
100.00
100.00
Toyota Argentina S.A.
...........................................
Argentina
100.00
100.00
Toyota do Brasil Ltda.
...........................................
Brazil
100.00
100.00
Toyota South Africa Motors (Pty) Ltd.
..............................
South Africa
100.00
100.00
45
4.D
PROPERTY,
PLANTS
AND
EQUIPMENT
As
of
March
31,
2022,
Toyota
and
its
affiliated
companies
produced
automobiles
and
related
components
through
more
than
50
overseas
manufacturing
organizations
in
27
countries
and
regions
besides
Japan.
The
facilities
are located
principally
in
Japan,
the United
States, Canada,
the United
Kingdom, France,
Turkey, Czech
Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia,
South Africa, Argentina and Brazil.
In
addition
to
its
manufacturing
facilities,
Toyota’s
properties
include
sales
offices
and
other
sales
facilities
in major cities, repair
service facilities and
research and development facilities.
The
following
table
sets
forth
information,
as
of
March
31,
2022,
with
respect
to
Toyota’s
principal
facilities
and
organizations,
all
of
which
are
owned
by
Toyota
Motor
Corporation
or
its
subsidiaries.
However,
small portions, all under approximately
20%, of some facilities
are on leased premises.
Facility
or
Subsidiary
Name
Location
Land
Area
(thousands
of
square
meters)
Number
of
Employees
Principal
Products
or
Functions
Japan
(Toyota
Motor
Corporation)
Toyota Technical Center
Shimoyama
...................
Toyota City, Aichi Pref.
5,573
207
Research and
Development
Tahara Plant
.....................
Tahara City, Aichi Pref.
4,032
6,738
Automobiles
Toyota Head Office and Technical
Center
........................
Toyota City, Aichi Pref.
2,767
22,506
Research and
Development
Higashi-Fuji Technical Center
.......
Susono City, Shizuoka Pref.
2,722
2,703
Research and
Development
Motomachi Plant
.................
Toyota City, Aichi Pref.
1,575
8,349
Automobiles
Takaoka Plant
...................
Toyota City, Aichi Pref.
1,317
4,068
Automobiles
Kamigo Plant
....................
Toyota City, Aichi Pref.
895
3,063
Automobile parts
Kinu-ura Plant
...................
Hekinan City, Aichi Pref.
808
2,878
Automobile parts
Honsha Plant
....................
Toyota City, Aichi Pref.
623
1,985
Automobile parts
Nagoya Office
...................
Nagoya City, Aichi Pref.
5
2,306
Office
Japan
(Subsidiaries)
Daihatsu Motor Co., Ltd
...........
Ikeda City, Osaka, etc.
7,740
11,293
Automobiles
Hino Motors, Ltd.
................
Hino City, Tokyo, etc.
6,330
12,691
Automobiles
Toyota Auto Body Co., Ltd.
........
Kariya City, Aichi Pref., etc.
2,271
11,530
Automobiles
Toyota Motor Kyushu, Inc.
.........
Miyawaka City, Fukuoka Pref.
1,940
8,563
Automobiles etc.
TOYOTA Mobility Tokyo Inc.
......
Minato-ku,
Tokyo, etc.
365
6,758
Sales facilities
Outside
Japan
(Subsidiaries)
Toyota Motor Manufacturing, Texas,
Inc.
..........................
Texas, U.S.A.
8,127
2,825
Automobiles
Toyota Motor Manufacturing,
Kentucky, Inc.
.................
Kentucky, U.S.A.
5,161
7,460
Automobiles
Toyota Motor Manufacturing Canada,
Inc.
..........................
Ontario, Canada
4,752
7,756
Automobiles
Toyota Motor Thailand Co., Ltd.
....
Samutprakarn,
Thailand
4,414
8,670
Automobiles
Toyota Motor Manufacturing, Indiana,
Inc.
..........................
Indiana, U.S.A.
4,359
6,521
Automobiles
Toyota
is
constantly
engaged
in
upgrading,
modernizing
and
revamping
the
operations
of
its
manufacturing
facilities
based on
its assessment
of
market needs
and prospects.
To respond
flexibly
to fluctuations
in
demand in
each
of
its
production
operations
throughout
the
world,
Toyota
continually
reviews
and
implements
appropriate
production
measures
such
as
revising
takt
time
and
adjusting
days
of
operation.
As
a
result,
Toyota
believes
it
would require unreasonable
effort to track the
exact productive capacity and the
extent of utilization of
each of its
manufacturing facilities
with a reasonable degree of accuracy.
46
As
of
March
31,
2022,
property,
plant
and
equipment
having
a
net
book
value
of
approximately
¥1,474.6
billion
was
pledged
as
collateral
securing
indebtedness
incurred
by
Toyota
Motor
Corporation’s
consolidated
subsidiaries.
Toyota
believes
that
there
does
not
exist
any
material
environmental
issues
that
may
affect the company’s utilization
of its assets.
Toyota
considers
all
its
principal
manufacturing
facilities
and
other
significant
properties
to
be
in
good
condition and adequate to meet the
needs of its operations.
See “— Business Overview
— Capital Expenditures
and Divestitures” for a
description of Toyota’s material
plans to construct, expand or improve
facilities.
ITEM
4A.
UNRESOLVED
STAFF
COMMENTS
None.
ITEM
5.
OPERATING
AND
FINANCIAL
REVIEW
AND
PROSPECTS
5.A
OPERATING
RESULTS
Financial
information
discussed
in
this
section
is
derived
from
Toyota’s
consolidated
financial
statements
that
appear
elsewhere
in
this
annual
report.
The
financial
statements
have
been
prepared
in
accordance
with
IFRS,
as
issued
by
the
IASB.
Overview
The
business
segments
of
Toyota
include
automotive
operations,
financial
services
operations
and
all
other
operations.
Automotive
operations
are
Toyota’s
most
significant
business
segment,
accounting
for
89%
of
Toyota’s
total
revenues
before
the
elimination
of
intersegment
revenues
for
fiscal
2022.
Toyota’s
primary
markets
based
on
vehicle
unit
sales
for
fiscal
2022
were:
Japan
(23.4%),
North
America
(29.1%),
Europe
(12.4%) and Asia (18.7%).
Automotive
Market
Environment
The
worldwide
automotive
market
is
highly
competitive
and
volatile.
The
demand
for
automobiles
is
affected
by a number
of
factors
including
social,
political
and general economic
conditions;
introduction
of new vehicles
and
technologies;
and
costs
incurred
by
customers
to
purchase
or
operate
vehicles.
These
factors
can
cause
consumer
demand to vary substantially in different geographic markets and for different types of automobiles.
During
fiscal
2022,
automotive
markets
recovered
compared
with
fiscal
2021
as
demand
remained
firm
in
regions
including
the
U.S.,
China,
and
Japan,
despite
being
forced
to
curb
production
worldwide
due
to
limited
parts supplies caused by the global
semiconductor shortage and the impact
of COVID-19.
The
following
table
sets
forth
Toyota’s
consolidated
vehicle
unit
sales
by
geographic
market
based
on
location of customers for the
past three fiscal years.
Thousands
of
units
Year
Ended
March
31,
2020
2021
2022
Japan
...........................................................
2,240
2,125
1,924
North America
....................................................
2,713
2,313
2,394
Europe
..........................................................
1,029
959
1,017
Asia
............................................................
1,600
1,222
1,543
Other*
..........................................................
1,372
1,027
1,352
Overseas total
....................................................
6,715
5,521
6,306
Total
...........................................................
8,955
7,646
8,230
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East, etc.
47
During
both
fiscal
2021
and
fiscal
2022,
Toyota’s
consolidated
vehicle
unit
sales
in
Japan
decreased
due
to
weak
market
conditions
as
compared
to
the
prior
fiscal
year.
During
fiscal
2021,
overseas
vehicle
unit
sales
decreased,
particularly
in
North
America,
Asia
and
Other,
where
the
contraction
of
automotive
markets
was
especially
pronounced.
During
fiscal
2022,
overseas
vehicle
unit
sales
increased,
particularly
in
Asia
and
Other,
due to recovery of demand.
Toyota’s share of
total vehicle
unit sales in each
market is influenced by the quality,
safety, reliability,
price,
design,
performance,
economy
and
utility
of
Toyota’s
vehicles
compared
with
those
offered
by
other
manufacturers.
The
timely
introduction
of
new
or
redesigned
vehicles
is
also
an
important
factor
in
satisfying
customer
needs.
Toyota’s
ability
to
satisfy
changing
customer
preferences
can
affect
its
revenues
and
earnings
significantly.
The profitability of Toyota’s automotive
operations is affected
by many factors. These factors
include:
vehicle
unit sales volumes,
the mix
of vehicle models and options sold,
the level
of parts and service sales,
the levels
of price discounts and other
sales incentives and marketing
costs,
the cost
of customer warranty claims
and other customer satisfaction
actions,
the cost
of research and development and other
fixed costs,
the prices
of raw materials,
the ability
to control costs,
the efficient
use of production capacity,
the
adverse effect
on production due
to such factors
as the reliance
on various suppliers
for the provision
of supplies, or the general scarcity
of certain supplies,
climate
change risk, including both physical
risks as well as transition
risks,
the
adverse
effect
on
market,
sales
and
productions
of
natural
calamities
as
well
as
the
outbreak
and
spread of epidemics and interruptions
of social infrastructure,
and
changes in
the value of the Japanese yen and other
currencies in which Toyota conducts business.
Changes
in
laws,
regulations,
policies
and
other
governmental
actions
can
also
materially
impact
the
profitability
of
Toyota’s
automotive
operations.
These
laws,
regulations
and
policies
include
those
attributed
to
environmental
matters,
vehicle
safety,
fuel
economy
and
emissions
that
can
add
significantly
to
the
cost
of
vehicles.
Many governments also
impose local content requirements,
impose tariffs
and other trade barriers,
and enact
price
or
exchange
controls
that
can
limit
an
automaker’s
operations
and
can
make
the
repatriation
of
profits
unpredictable.
Changes
in
these
laws,
regulations,
policies
and
other
governmental
actions
may
affect
the
production,
licensing,
distribution
or
sale
of
Toyota’s
products,
cost
of
products
or
applicable
tax
rates.
From
time-to-time
when
potential
safety
problems
arise,
Toyota
issues
vehicle
recalls
and
takes
other
safety
measures
including
safety
campaigns
relating
to
its
vehicles.
The
recalls
and
other
safety
measures
described
above
have
led
to
a
number
of
claims
and
lawsuits
against
Toyota.
For
a
more
detailed
description
of
these
claims
and
lawsuits,
see
“Information
on
the
Company
Business
Overview
Legal
Proceedings”
and
note
24
and
30
to
the consolidated financial statements.
48
The
worldwide
automotive
industry
is
in
a
period
of
global
competition
which
may
continue
for
the
foreseeable
future,
and
in
general
the
competitive
environment
in
which
Toyota
operates
is
likely
to
intensify.
Toyota believes
it
has
the
resources,
strategies
and technologies
in
place
to compete
effectively
in
the
industry
as
an independent company for the foreseeable
future.
Financial
Services
Operations
The
competition
in
the
worldwide
automobile
financial
services
industry
is
intensifying.
As
competition
increases,
margins
on
financing
transactions
may
decrease
and
market
share
may
also
decline
as
customers
obtain financing for Toyota vehicles
from alternative sources.
Toyota’s financial
services
operations
mainly
include
loans
and leasing
programs
for
customers
and dealers.
Toyota
believes
that
its
ability
to
provide
financing
to
its
customers
is
an
important
value
added
service.
Therefore,
Toyota
has
expanded
its
network
of
finance
subsidiaries
in
order
to
offer
financial
services
in
many
countries.
Toyota’s
competitors
for
retail
financing
and
retail
leasing
include
commercial
banks,
credit
unions
and
other
finance
companies.
Meanwhile,
commercial
banks
and
other
captive
automobile
finance
companies
also
compete against Toyota’s wholesale
financing activities.
Toyota’s total
receivables
related
to
financial
services
increased
during
fiscal 2022
mainly
due to
the impact
of
changes
in
exchange
rates.
Also,
vehicles
and
equipment
on
operating
leases
increased
during
fiscal
2022
mainly due to the impact of changes
in exchange rates.
For
details
on
receivables
related
to
financial
services
and
vehicles
and
equipment
on
operating
leases,
see
notes 8 and 12 to the consolidated financial
statements.
Toyota’s
receivables
related
to
financial
services
are
subject
to
collectability
risks.
These
risks
include
consumer
and
dealer
insolvencies
and
insufficient
collateral
values
(less
costs
to
sell)
to
realize
the
full
carrying
values
of
these
receivables.
See
notes
4
and
19
to
the
consolidated
financial
statements
for
additional
information.
Toyota
continues
to
originate
leases
to
finance
new
Toyota
vehicles.
These
leasing
activities
are
subject
to
residual
value
risk.
Residual
value
losses
could
be
incurred
when
the
lessee
of
a
vehicle
does
not
exercise
the
option to
purchase
the
vehicle
at
the
end
of
the
lease
term.
See
note
3 to
the
consolidated
financial
statements
for
additional information.
Toyota enters
into interest
rate
swap agreements
and cross currency
interest rate
swap agreements
to convert
its
fixed-rate
debt
to
variable-rate
functional
currency
debt.
A
portion
of
the
derivative
instruments
are
entered
into
to
hedge
interest
rate
risk
from
an
economic
perspective
and
are
not
designated
as
a
hedge
of
specific
assets
or liabilities
on
Toyota’s consolidated
statements
of financial
position
and accordingly,
unrealized
gains or
losses
related to
derivatives
that
are not
designated
as a hedge
are recognized
currently
in operations.
See
the discussion
in
“Quantitative
and
Qualitative
Disclosures
about
Market
Risk”
and
notes
20
and
21
to
the
consolidated
financial statements.
The
fluctuations
in
funding
costs
can
affect
the
profitability
of
Toyota’s
financial
services
operations.
Funding
costs
are
affected
by
a
number
of
factors,
some
of
which
are
not
in
Toyota’s
control.
These
factors
include
general
economic
conditions,
prevailing
interest
rates
and
Toyota’s
financial
strength.
Funding
costs
decreased during fiscal 2021 and 2022 mainly
as a result of lower interest
rates.
Toyota
launched
its
credit
card
business
in
Japan
in
April
2001.
As
of
March
31,
2021,
Toyota
had
16.4 million
cardholders,
an
increase
of 0.5
million
cardholders
compared
with March
31,
2020. As of
March 31,
49
2022, Toyota had
15.7 million
cardholders, a decrease
of 0.7 million
cardholders
compared with March
31, 2021.
Credit
card
receivables
as
of
March
31,
2021
increased
by
¥2.4
billion
from
March
31,
2020
to
¥484.1
billion,
and that as of March 31, 2022 increased by ¥17.3 billion
from March 31, 2021 to ¥501.4 billion.
Other
Business
Operations
Toyota’s
other
business
operations
consist
of
information
technology
related
businesses
(including
information
technology
and
telecommunications
and
GAZOO),
housing
(including
the
manufacture
and
sale
of
prefabricated
homes)
and
other
businesses.
During
fiscal
2020,
TMC
and
Panasonic
Corporation
(“Panasonic”)
established
a
new
joint
venture,
Prime
Life
Technologies
Corporation
(“Prime
Life
Technologies”),
relating
to
the
town
development
business.
Prime
Life
Technologies
became
Toyota’s
affiliated
company,
and
Toyota
Housing
Corporation
(“THC”)
as
well
as
Misawa
Homes
Co.,
Ltd.
(“Misawa
Homes”)
became
subsidiaries
of
Prime
Life
Technologies,
causing
THC
and
Misawa
Homes
to
no
longer
be
Toyota’s
consolidated
subsidiary
companies.
Toyota does not expect
its other business operations
to materially contribute
to Toyota’s consolidated results
of operations.
Currency
Fluctuations
Toyota
is
affected
by
fluctuations
in
foreign
currency
exchange
rates.
Toyota
is
exposed
to
fluctuations
in
the
value
of
the
Japanese
yen
against
the
U.S.
dollar
and
the
euro
as
well
as
the
Australian
dollar,
the
Russian
ruble,
the
Canadian
dollar,
the
British
pound
and
others.
Toyota’s
consolidated
financial
statements,
which
are
presented
in
Japanese
yen,
are
affected
by
foreign
currency
exchange
fluctuations
through
both
translation
risk
and transaction risk.
Translation
risk
is
the
risk
that
Toyota’s
consolidated
financial
statements
for
a
particular
period
or
for
a
particular
date
will
be
affected
by
changes in
the
prevailing
exchange
rates
of
the
currencies
in
those
countries
in
which Toyota
does business
compared
with
the
Japanese yen.
Even
though the
fluctuations
of
currency exchange
rates
to
the
Japanese
yen
can
be
substantial,
and
therefore
significantly
impact
comparisons
with
prior
periods
and
among
the
various
geographic
markets,
the
translation
risk
is
a
reporting
consideration
and
does
not
reflect
Toyota’s underlying results of operations.
Toyota does not hedge against translation
risk.
Transaction
risk
is
the
risk
that
the
currency
structure
of
Toyota’s
costs
and
liabilities
will
deviate
from
the
currency structure
of sales proceeds
and assets. Transaction
risk relates
primarily
to sales proceeds
from Toyota’s
non-domestic operations from
vehicles produced in Japan.
Toyota
believes
that
the
location
of
its
production
facilities
in
different
parts
of
the
world
has
significantly
reduced
the
level
of
transaction
risk.
As
part
of
its
globalization
strategy,
Toyota
has
continued
to
localize
production
by
constructing
production
facilities
in
the
major
markets
in
which
it
sells
its
vehicles.
In
fiscal
2021
and
2022,
Toyota
produced
69.7%
and
71.6%,
respectively,
of
its
non-domestic
sales
outside
Japan.
In
North
America,
65.3%
and
68.5%
of
vehicles
sold
in
fiscal
2021
and
2022,
respectively,
were
produced
locally.
In
Europe,
71.9%
and
69.1%
of
vehicles
sold
in
fiscal
2021
and
2022,
respectively,
were
produced
locally.
Localizing
production
enables
Toyota
to
locally
purchase
many
of
the
supplies
and
resources
used
in
the
production process, which allows for a better
match of local currency
revenues with local currency expenses.
Toyota
also
enters
into
foreign
currency
transactions
and
other
hedging
instruments
to
address
a
portion
of
its
transaction
risk.
This
has
reduced,
but
not
eliminated,
the
effects
of
foreign
currency
exchange
rate
fluctuations,
which
in
some years
can
be significant.
See
notes
20 and
21
to the
consolidated
financial
statements
for additional information.
Generally,
a
weakening
of
the
Japanese
yen
against
other
currencies
has
a
positive
effect
on
Toyota’s
revenues,
operating
income
and
net
income
attributable
to
Toyota
Motor
Corporation.
A
strengthening
of
the
50
Japanese
yen
against
other
currencies
has
the
opposite
effect.
In
fiscal
2021,
the
Japanese
yen
was
on
average
stronger
against
the
U.S.
dollar
in
comparison
to
the
previous
fiscal
year,
but
in
fiscal
2022,
was
on
average
weaker
against
the
U.S.
dollar
in
comparison
to
the
previous
fiscal
year.
At
the
end
of
each
of
fiscal
2021
and
2022,
the
Japanese
yen
was
weaker
against
the
U.S.
dollar
in
comparison
to
the
end
of
fiscal
2020
and
2021,
respectively.
In
fiscal
2021
and
2022,
the
Japanese
yen
was
on
average
weaker
against
the
euro
in
comparison
to
fiscal
2020
and
2021,
respectively.
At
the
end
of
each
of
fiscal
2021
and
2022,
the
Japanese
yen
was
weaker
against
the
euro
in
comparison
to
the
end
of
fiscal
2020
and
2021,
respectively.
See
note
19
to
the
consolidated
financial statements for
additional information.
Segmentation
Toyota’s
most
significant
business
segment
is
its
automotive
operations.
Toyota
carries
out
its
automotive
operations
as
a
global
competitor
in
the
worldwide
automotive
market.
Management
allocates
resources
to,
and
assesses
the
performance
of,
its
automotive
operations
as
a
single
business
segment
on
a
worldwide
basis
and
assesses financial
and non-financial
data such as
vehicle unit sales, production
volume, market share information,
vehicle
model
plans
and
plant
location
costs
to
allocate
resources
within
the
automotive
operations.
Toyota
does
not
manage
any
subset
of
its
automotive
operations,
such
as
domestic
or
overseas
operations
or
parts,
as
separate
management units.
Geographic
Breakdown
The
following
table
sets
forth
Toyota’s
sales
revenues
in
each
geographic
market
based
on
the
country
location
of
TMC
or
the
subsidiaries
that
transacted
the
sale
with
the
external
customer
for
the
past
three
fiscal
years.
Yen
in
millions
Year
ended
March
31,
2020
2021
2022
Japan
......................................................
9,503,238
8,587,193
8,214,740
North America
...............................................
10,419,869
9,325,950
10,897,946
Europe
.....................................................
3,133,227
2,968,289
3,692,214
Asia
.......................................................
4,785,489
4,555,897
5,778,115
Other*
.....................................................
2,024,724
1,777,266
2,796,493
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East.
51
Results
of
Operations
Fiscal
2022
Compared
with
Fiscal
2021
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Sales revenues:
Japan
........................................
14,948,931
15,991,436
1,042,505
7.0%
North America
................................
9,491,803
11,166,479
1,674,676
17.6
Europe
......................................
3,134,489
3,867,847
733,359
23.4
Asia
........................................
5,045,295
6,530,566
1,485,272
29.4
Other*
.......................................
1,872,895
2,928,183
1,055,287
56.3
Intersegment elimination/unallocated
amount
........
(7,278,820)
(9,105,004)
(1,826,185)
Total
....................................
27,214,594
31,379,507
4,164,914
15.3
Operating income (loss):
Japan
........................................
1,149,217
1,423,445
274,228
23.9
North America
................................
401,361
565,784
164,423
41.0
Europe
......................................
107,971
162,973
55,002
50.9
Asia
........................................
435,940
672,350
236,410
54.2
Other*
.......................................
59,847
238,169
178,322
298.0
Intersegment elimination/unallocated
amount
........
43,413
(67,024)
(110,436)
Total
....................................
2,197,748
2,995,697
797,948
36.3
Operating margin
..................................
8.1%
9.5%
1.4%
Income before income taxes
..........................
2,932,354
3,990,532
1,058,177
36.1
Net margin from income before
income taxes
............
10.8%
12.7%
1.9%
Net income attributable to Toyota
Motor Corporation
.....
2,245,261
2,850,110
604,849
26.9
Net margin attributable to
Toyota Motor Corporation
......
8.3%
9.1%
0.8%
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East.
Sales
Revenues
Toyota
had
sales
revenues
for
fiscal
2022
of
¥31,379.5
billion,
an
increase
of
¥4,164.9
billion,
or
15.3%,
compared
with
the
prior
fiscal
year.
The
increase
resulted
mainly
from
the
¥1,510.0
billion
impact
of
increased
vehicle
unit
sales
and
changes
in
sales
mix
and
the
¥1,390.0
billion
favorable
impact
of
changes
in
exchange
rates.
The
table
below
shows
Toyota’s
sales
revenues
from
external
customers
by
product
category
and
by
business.
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Vehicles
.........................................
20,509,606
23,739,442
3,229,836
15.7%
Parts and components for production
...................
1,287,053
1,504,215
217,162
16.9
Parts and components for after
service
.................
2,049,187
2,407,143
357,956
17.5
Other
............................................
752,000
881,193
129,193
17.2
Total Automotive
..............................
24,597,846
28,531,993
3,934,147
16.0
All Other
.....................................
479,553
541,436
61,883
12.9
Total sales of products
..........................
25,077,398
29,073,428
3,996,030
15.9
Financial services
..............................
2,137,195
2,306,079
168,884
7.9
Total sales revenues
........................
27,214,594
31,379,507
4,164,914
15.3%
52
Toyota’s
sales
revenues
include
sales
revenues
from
sales
of
products,
consisting
of
sales
revenues
from
automotive
operations
and
all
other
operations,
which
increased
by
15.9%
during
fiscal
2022
compared
with
the
prior
fiscal
year
to
¥29,073.4
billion,
and
sales
revenues
from
financial
services
operations,
which
increased
by
7.9%
during
fiscal
2022
compared
with
the
prior
fiscal
year
to
¥2,306.0
billion.
The
increase
in
sales
revenues
from
sales
of
products
is
mainly
due
to
an
increase
in
Toyota
vehicle
unit
sales
of
584 thousand
vehicles
and
the
favorable impact of changes in
exchange rates compared with the prior
fiscal year.
The
following
table
shows
the
number
of
financing
contracts
by
geographic
region
at
the
end
of
fiscal
2022
and 2021, respectively.
Number
of
financing
contracts
in
thousands
As
of
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Japan
............................................
2,660
2,745
85
3.2%
North America
....................................
5,553
5,549
(4)
(0.1)
Europe
..........................................
1,412
1,507
95
6.7
Asia
............................................
1,992
2,070
78
3.9
Other*
...........................................
8
8
1
8
9
5
1
4
1
.
6
Total
........................................
12,498
12,766
268
2.1%
*
“Other” consists of Central
and South America, Oceania and Africa.
Geographically,
sales
revenues
(before
the
elimination
of
intersegment
revenues)
for
fiscal
2022
increased
by 7.0%
in Japan,
17.6%
in
North America,
23.4%
in Europe,
29.4%
in Asia,
and
56.3% in
Other
compared with
the
prior
fiscal
year.
Excluding
the
impact
of
changes
in
exchange
rates
of
¥1,390.0
billion,
sales
revenues
in
fiscal
2022
would
have
increased
by
7.0%
in
Japan,
10.5%
in
North
America,
16.6%
in
Europe,
20.3%
in
Asia,
and 49.2% in Other compared with the prior
fiscal year.
The
following
is
a
discussion
of
sales
revenues
in
each
geographic
market
(before
the
elimination
of
intersegment revenues).
Japan
Thousands
of
units
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Toyota’s consolidated vehicle unit
sales*
...............
3,853
3,640
(213)
(5.5)%
*
including number of exported
vehicle unit sales
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Sales revenues:
Sales of products
..............................
14,674,496
15,706,514
1,032,018
7.0%
Financial services
..............................
274,435
284,922
10,487
3.8
Total
....................................
14,948,931
15,991,436
1,042,505
7.0%
Despite
Toyota’s
domestic
and
exported
vehicle
unit
sales
having
decreased
by
213
thousand
vehicles
compared
with
the
prior
fiscal
year,
sales
revenues
in
Japan
increased
due
primarily
to
the
favorable
impact
of
changes
in
exchange
rates
related
to
export
transactions.
For
fiscal
2021
and
2022,
exported
vehicle
unit
sales
were 1,728 thousand units and 1,716 thousand units, respectively.
53
North
America
Thousands
of
units
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
2,313
2,394
81
3.5%
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Sales revenues:
Sales of products
..............................
7,995,051
9,578,534
1,583,483
19.8%
Financial services
..............................
1,496,752
1,587,945
91,193
6.1
Total
....................................
9,491,803
11,166,479
1,674,676
17.6%
Sales
revenues
in
North
America
increased
due
primarily
to
the
81
thousand
vehicles
increase
in
vehicle
unit sales and the favorable impact
of changes in exchange rates compared
with the prior fiscal
year.
Europe
Thousands
of
units
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
9
5
9
1,017
58
6.0%
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Sales revenues:
Sales of products
..............................
2,976,259
3,671,205
694,946
23.3%
Financial services
..............................
158,229
196,642
38,413
24.3
Total
....................................
3,134,489
3,867,847
733,359
23.4%
Sales
revenues
in
Europe
increased
due
primarily
to
the
58
thousand
vehicles
increase
in
vehicle
unit
sales
and the favorable impact of changes
in exchange rates compared with the
prior fiscal year.
Asia
Thousands
of
units
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
1,222
1,543
321
26.3%
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Sales revenues:
Sales of products
..............................
4,874,746
6,345,172
1,470,426
30.2%
Financial services
..............................
170,549
185,394
14,845
8.7
Total
....................................
5,045,295
6,530,566
1,485,272
29.4%
54
Sales
revenues
in
Asia
increased
due
primarily
to
the
321
thousand
vehicles
increase
in
vehicle
unit
sales
and the favorable impact of changes
in exchange rates compared with the
prior fiscal year.
Other
Thousands
of
units
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
1,027
1,352
326
31.7%
Yen
in
millions
Year
ended
March
31,
2022
v.
2021Change
2021
2022
Amount
Percentage
Sales revenues:
Sales of products
..............................
1,719,132
2,756,840
1,037,708
60.4%
Financial services
..............................
153,764
171,343
17,579
11.4
Total
....................................
1,872,895
2,928,183
1,055,287
56.3%
Sales
revenues
in
Other
increased
due
primarily
to
the
326
thousand
vehicles
increase
in
vehicle
unit
sales
compared with the prior fiscal
year.
Operating
Costs
and
Expenses
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Operating costs and expenses
Cost of products sold
...........................
21,199,890
24,250,784
3,050,894
14.4%
Cost of financing services
.......................
1,182,330
1,157,050
(25,280)
(2.1)
Selling, general and administrative
................
2,634,625
2,975,977
341,351
13.0
Total
....................................
25,016,845
28,383,811
3,366,965
13.5%
Yen
in
millions
2022
v.
2021
Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit
sales and sales mix
.............................
1,330,000
Effect of changes in exchange rates
..........................................
780,000
Effect of decrease of cost of financial
services
..................................
(100,000)
Effect of cost reduction efforts
..............................................
360,000
Increase or decrease in expenses
and expense reduction efforts
....................
220,000
Other
..................................................................
776,965
Total
..............................................................
3,366,965
Operating
costs
and
expenses
increased
by
¥3,366.9
billion,
or
13.5%,
to
¥28,383.8
billion
during
fiscal
2022 compared with the prior fiscal
year.
Cost
Reduction
Efforts
Operating
costs
and
expenses
increased
by
¥360.0
billion
during
fiscal
2022.
This
increase
was
due
to
a
¥640.0
billion
increase
in
operating
costs
and
expenses
attributable
to
the
impact
of
soaring
materials
prices.
55
Through
continued
cost
reduction
efforts
together
with
suppliers,
however,
that
increase
was
partially
offset
by
a
¥240.0
billion
reduction
principally
attributable
to
value
engineering
activities
and
other
cost
reduction
efforts
concerning
design-related
costs,
and
a
¥40.0
billion
reduction
attributable
to
cost
reduction
efforts
principally
at
plants and logistics departments.
The
cost
reduction
efforts
described
above
related
to
ongoing
value
engineering
and
value
analysis
activities,
the
use
of
common
parts
resulting
in
a
reduction
of
part
types
and
other
manufacturing
initiatives
designed
to
reduce
the
costs
of
vehicle
production.
The
impact
of
soaring
materials
prices
includes
the
impact
of
fluctuation
in
the
price
of
steel,
precious
metals,
non-ferrous
alloys
including
aluminum,
plastic
parts
and
other
production materials and parts.
Cost
of
Products
Sold
Cost
of
products
sold
increased
by
¥3,050.8
billion,
or
14.4%,
to
¥24,250.7
billion
during
fiscal
2022
compared with the
prior fiscal
year. This increase
mainly reflected
the impact of changes in vehicle
unit sales and
sales
mix,
the
unfavorable
impact
of
soaring
materials
prices,
and
the
unfavorable
impact
of
fluctuations
in
foreign currency translation
rates.
Cost
of
Financial
Services
Cost
of
financial
services
decreased
by
¥25.2
billion,
or
2.1%,
to
¥1,157.0
billion
during
fiscal
2022
compared with the prior fiscal
year.
Selling,
General
and
Administrative
Expenses
Selling,
general
and
administrative
expenses
increased
by
¥341.3
billion,
or
13.0%,
to
¥2,975.9
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
mainly
reflected
the
unfavorable
impact
of
fluctuations in foreign currency
translation rates.
Operating
Income
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
860,000
Effect of cost reduction efforts
..............................................
(360,000)
Effect of changes in exchange rates
..........................................
610,000
Increase or decrease in expenses
and expense reduction efforts
....................
(220,000)
Other
..................................................................
(92,052)
Total
..............................................................
797,948
Toyota’s
operating
income
increased
by
¥797.9
billion,
or
36.3%,
to
¥2,995.6
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
was
due
to
the
¥860.0
billion
impact
of
marketing
efforts
and
the
¥610.0
billion
favorable
impact
of
changes
in
exchange
rates,
partially
offset
by,
among
other
factors,
the
¥360.0
billion
aggregate
unfavorable
impact
of
factors
categorized
as
cost
reduction
efforts
(including
fluctuations
in
raw
materials
prices)
and
the
¥220.0
billion
aggregate
unfavorable
impact
of
changes
in
expenses
and expense reduction efforts.
Marketing
efforts
includes
changes
in
vehicle
unit
sales
and
sales
mix,
sales
expenses
and
other.
“Other”
includes valuation gains and losses
from interest rate swaps etc.
56
The
favorable
impact
of
changes
in
exchange
rates
was
due
mainly
to
the
¥590.0
billion
impact
of
overseas
transactions such as imports
and exports denominated in foreign
currencies.
During
fiscal
2022,
operating
income
(before
elimination
of
intersegment
profits)
compared
with
the
prior
fiscal
year
increased
by
¥274.2
billion,
or
23.9%,
in
Japan,
¥164.4
billion,
or
41.0%,
in
North
America,
¥55.0 billion, or 50.9%, in Europe, ¥236.4 billion, or
54.2%, in Asia, and ¥178.3 billion, or 298.0%, in Other.
The following is a description of operating
income in each geographic market.
Japan
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
260,000
Effect of cost reduction efforts
..............................................
(145,000)
Effect of changes in exchange rates
..........................................
370,000
Increase or decrease in expenses
and expense reduction efforts
....................
(50,000)
Other
..................................................................
(160,772)
Total
..............................................................
274,228
North
America
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
380,000
Effect of cost reduction efforts
..............................................
(125,000)
Effect of changes in exchange rates
..........................................
50,000
Increase or decrease in expenses
and expense reduction efforts
....................
(135,000)
Other
..................................................................
(5,577)
Total
..............................................................
164,423
Europe
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
105,000
Effect of cost reduction efforts
..............................................
(40,000)
Effect of changes in exchange rates
..........................................
0
Increase or decrease in expenses
and expense reduction efforts
....................
(10,000)
Other
..................................................................
2
Total
..............................................................
55,002
57
Asia
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
130,000
Effect of cost reduction efforts
..............................................
(35,000)
Effect of changes in exchange rates
..........................................
170,000
Increase or decrease in expenses
and expense reduction efforts
....................
(40,000)
Other
..................................................................
11,410
Total
..............................................................
236,410
Other
Yen
in
millions
2022
v.
2021
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
95,000
Effect of cost reduction efforts
..............................................
(15,000)
Effect of changes in exchange rates
..........................................
20,000
Increase or decrease in expenses
and expense reduction efforts
....................
15,000
Other
..................................................................
63,322
Total
..............................................................
178,322
Other
Income
and
Expenses
Share
of
profit
(loss)
of
investments
accounted
for
using
the
equity
method
during
fiscal
2022
increased
by
¥209.3
billion,
or
59.6%,
to
¥560.3
billion
compared
with
the
prior
fiscal
year.
This
increase
was
due
mainly
to
an
increase
during
fiscal
2022
in
net
income
attributable
to
the
shareholders
of
companies
accounted
for
by
the
equity method.
Other
finance
income
decreased
by
¥100.4
billion,
or
23.1%,
to
¥334.7
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
decrease
was
due
mainly
to
a
decrease
during
fiscal
2022
in
profit
on
sales
of
securities.
Other
finance
costs
decreased
by
¥3.5
billion,
or
7.4%,
to
¥43.9
billion
during
fiscal
2022
compared
with
the prior fiscal year.
Foreign
exchange
gain
(loss),
net
increased
by
¥201.0
billion
to
¥216.1
billion
during
fiscal
2022
compared
with the
prior
fiscal
year.
Foreign
exchange
gains
and
losses
include
the
differences
between the
value
of
foreign
currency
denominated
assets
and
liabilities
recognized
through
transactions
in
foreign
currencies
translated
at
prevailing
exchange
rates
and
the
value
at
the
date
the
transaction
settled
during
the
fiscal
year,
including
those
settled
using
forward
foreign
currency
exchange
contracts,
or
the
value
translated
by
appropriate
year-end
exchange
rates.
The
¥201.0
billion
increase
in
foreign
exchange
gain
(loss),
net
was
due
mainly
to
the
gains
recorded
in
fiscal
2022
resulting
from
the
Japanese
yen
being
weaker
against
foreign
currencies
at
the
maturity
dates of the foreign currency deposit
than at the dates of the deposit.
Other
income
(loss),
net
decreased
by
¥53.2
billion,
to
¥72.4
billion
in
losses
during
fiscal
2022
compared
with the prior fiscal year.
58
Income
Taxes
The provision
for
income
taxes
increased
by
¥465.9
billion,
or
71.7%,
to
¥1,115.9
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
was
due
mainly
to
the
increase
in
income
before
income
taxes
and
reversals
of
deferred
tax
assets
on
account
of
the
reassessment
of
their
recoverability.
The
average
effective
tax rate for fiscal 2022 was 28.0%.
Net
Income
Attributable
to
Non-controlling
Interests
Net
income
attributable
to
non-controlling
interests
decreased
by
¥12.6
billion,
or
34.0%,
to
¥24.5
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
decrease
was
due
mainly
to
a
decrease
during
fiscal
2022 in net income of consolidated subsidiaries.
Net
Income
Attributable
to
Toyota
Motor
Corporation
Net
income
attributable
to
Toyota
Motor
Corporation
increased
by
¥604.8
billion,
or
26.9%,
to
¥2,850.1 billion during fiscal 2022 compared
with the prior fiscal year.
Other
Comprehensive
Income,
Net
of
Tax
Other
comprehensive
income,
net
of
tax
increased
by
¥130.6
billion
to
¥1,143.1
billion
for
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
resulted
from
exchange
differences
on
translating
foreign
operations gains of
¥902.8 billion in
fiscal 2022 compared
with gains of ¥403.6 billion
in the prior fiscal
year and
share
of
other
comprehensive
income
of
equity
method
investees
gains
of
¥307.4
billion
in
fiscal
2022
compared
with gains
of
¥88.6
billion
in
the
prior
fiscal
year,
due
mainly
to
the
weakening
of the
yen
against the
U.S.
dollar
and
the
euro,
net
changes
in
revaluation
of
financial
assets
measured
at
fair
value
through
other
comprehensive
income
losses
of
¥203.4
billion
in
fiscal
2022
compared
with
gains
of
¥303.9
billion
in
the
prior
fiscal
year,
due
mainly
to
changes
in
prices
of
public
and
corporate
bonds,
and
remeasurements
of
defined
benefit
plans
gains
of
¥136.2 billion
in fiscal
2022 compared
with gains
of ¥216.2 billion
in the
prior fiscal
year, due mainly
to changes
in fair value of plan assets.
Segment
Information
The
following
is
a
discussion
of
the
results
of
operations
for
each
of
Toyota’s
operating
segments.
The
amounts presented are prior to
intersegment elimination.
Yen
in
millions
Year
ended
March
31,
2022
v.
2021
Change
2021
2022
Amount
Percentage
Automotive:
Sales revenues
................................
24,651,552
28,605,738
3,954,186
16.0%
Operating income
..............................
1,607,161
2,284,290
677,130
42.1
Financial Services:
Sales revenues
................................
2,162,237
2,324,026
161,789
7.5
Operating income
..............................
495,593
657,001
161,408
32.6
All Other:
Sales revenues
................................
1,052,365
1,129,876
77,512
7.4
Operating income
..............................
85,350
42,302
(43,048)
(50.4)
Intersegment elimination/unallocated
amount:
Sales revenues
................................
(651,560)
(680,133)
(28,573)
Operating income
..............................
9,645
12,104
2,459
59
Automotive
Operations
Segment
The automotive
operations
segment
is
Toyota’s
largest
operating
segment
by
sales
revenues.
Sales
revenues
for
the
automotive
segment
increased
during
fiscal
2022
by
¥3,954.1
billion,
or
16.0%,
to
¥28,605.7
billion
compared with the
prior fiscal
year. The increase
mainly reflects
the ¥1,510.0 billion favorable impact
of changes
in vehicle unit sales and sales
mix and the ¥1,250.0 billion favorable
impact of changes in exchange rates.
Operating
income
from
the
automotive
operations
increased
by
¥677.1
billion,
or
42.1%, to
¥2,284.2
billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
in
operating
income
was
due
mainly
to
the
¥760.0 billion
effect of
marketing activities
and the
¥570.0 billion favorable
impact
of changes in exchange
rates,
partially
offset by
the
¥360.0 billion
aggregate
unfavorable
impact of
factors categorized
as
cost reduction
efforts
(including fluctuations
in raw materials
prices) and the ¥220.0 billion aggregate
unfavorable impact of
changes in
expenses and expense reduction efforts.
Financial
Services
Operations
Segment
Sales
revenues
for
the
financial
services
operations
increased
during
fiscal
2022
by
¥161.7
billion,
or
7.5%,
to
¥2,324.0
billion
compared
with
the
prior
fiscal
year.
This
increase
was
due
mainly
to
the
favorable
impact
of
changes in exchange rates.
Operating income from
financial services
operations
increased by ¥161.4
billion, or 32.6%, to ¥657.0 billion
during
fiscal
2022
compared
with
the
prior
fiscal
year.
This
increase
was
due
primarily
to
the
increases
in
both
financing margin and financing volume.
All
Other
Operations
Segment
Sales
revenues
for
Toyota’s
other
operations
segments
increased
by
¥77.5
billion,
or
7.4%,
to
¥1,129.8 billion during fiscal 2022 compared
with the prior fiscal year.
Operating
income
from
Toyota’s
other
operations
segments
decreased
by
¥43.0
billion,
or
50.4%,
to
¥42.3 billion during fiscal 2022 compared
with the prior fiscal year.
60
Results
of
Operations
Fiscal
2021
Compared
with
Fiscal
2020
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Japan
........................................
16,441,852
14,948,931
(1,492,921)
(9.1)%
North America
................................
10,642,034
9,491,803
(1,150,231)
(10.8)
Europe
......................................
3,355,357
3,134,489
(220,868)
(6.6)
Asia
........................................
5,293,231
5,045,295
(247,936)
(4.7)
Other*
.......................................
2,114,111
1,872,895
(241,216)
(11.4)
Intersegment elimination/unallocated
amount
........
(7,980,038)
(7,278,820)
701,218
Total
....................................
29,866,547
27,214,594
(2,651,954)
(8.9)
Operating income(loss):
Japan
........................................
1,585,276
1,149,217
(436,059)
(27.5)
North America
................................
253,205
401,361
148,156
58.5
Europe
......................................
143,817
107,971
(35,846)
(24.9)
Asia
........................................
363,547
435,940
72,393
19.9
Other*
.......................................
84,001
59,847
(24,154)
(28.8)
Intersegment elimination/unallocated
amount
........
(30,613)
43,413
74,026
Total
....................................
2,399,232
2,197,748
(201,484)
(8.4)
Operating margin
..................................
8.0%
8.1%
0.1%
Income before income taxes
..........................
2,792,942
2,932,354
139,412
5.0
Net margin from income before
income taxes
............
9.4%
10.8%
1.4%
Net income attributable to Toyota
Motor Corporation
.....
2,036,140
2,245,261
209,121
10.3
Net margin attributable to
Toyota Motor Corporation
......
6.8%
8.3%
1.5%
*
“Other” consists of Central
and South America, Oceania, Africa and
the Middle East.
Sales
Revenues
Toyota
had
sales
revenues
for
fiscal
2021
of
¥27,214.5
billion,
a
decrease
of
¥2,651.9
billion,
or
8.9%,
compared
with
the
prior
fiscal
year.
The
decrease
resulted
mainly
from
the
¥2,080.0
billion
impact
of
decreased
vehicle
unit
sales
and
changes
in
sales
mix
and
the
¥560.0
billion
unfavorable
impact
of
changes
in
exchange
rates.
The
table
below
shows
Toyota’s
sales
revenues
from
external
customers
by
product
category
and
by
business.
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Vehicles
.........................................
22,647,701
20,509,606
(2,138,095)
(9.4)%
Parts and components for production
...................
1,197,089
1,287,053
89,964
7.5
Parts and components for after
service
.................
2,170,448
2,049,187
(121,261)
(5.6)
Other
............................................
755,141
752,000
(3,141)
(0.4)
Total Automotive
..............................
26,770,379
24,597,846
(2,172,533)
(8.1)
All Other
.....................................
923,314
479,553
(443,761)
(48.1)
Total sales of products
..........................
27,693,693
25,077,398
(2,616,295)
(9.4)
Financial Services
.............................
2,172,854
2,137,195
(35,659)
(1.6)
Total sales revenues
........................
29,866,547
27,214,594
(2,651,954)
(8.9)%
61
Toyota’s
sales
revenues
include
sales
revenues
from
sales
of
products,
consisting
of
sales
revenues
from
automotive
operations
and
all
other
operations,
which
decreased
by
9.4%
during
fiscal
2021
compared
with
the
prior
fiscal
year
to
¥25,077.3
billion,
and
sales
revenues
from
financial
services
operations
which
decreased
by
1.6%
during
fiscal
2021
compared
with
the
prior
fiscal
year
to
¥2,137.1
billion.
The
decrease
in
sales
revenues
from
sales
of
products
is
mainly
due
to
a
decrease
in
Toyota
vehicle
unit
sales
of
1,309
thousand
vehicles
compared with the prior fiscal
year.
The
following
table
shows
the
number
of
financing
contracts
by
geographic
region
at
the
end
of
fiscal
2021
and 2020, respectively.
Number
of
financing
contracts
in
thousands
As
of
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Japan
............................................
2,414
2,660
246
10.2%
North America
....................................
5,394
5,553
159
2.9
Europe
..........................................
1,318
1,412
94
7.1
Asia
............................................
1,864
1,992
128
6.9
Other*
...........................................
9
2
6
8
8
1
(45)
(4.9)
Total
........................................
11,916
12,498
582
4.9%
*
“Other” consists of Central
and South America, Oceania and Africa.
Geographically,
sales
revenues
(before
the
elimination
of
intersegment
revenues)
for
fiscal
2021
decreased
by
9.1%
in
Japan,
10.8%
in
North
America,
6.6%
in
Europe,
4.7%
in
Asia,
and
11.4%
in
Other
compared
with
the prior
fiscal
year.
Excluding
the impact
of
changes
in exchange
rates
of
¥560.0 billion,
sales
revenues
in fiscal
2021 would have decreased by 9.1% in Japan, 8.5% in
North America, 5.5% in Europe, and 3.5% in Asia, as
well
as would have increased by 0.1% in Other compared
with the prior fiscal year.
The
following
is
a
discussion
of
sales
revenues
in
each
geographic
market
(before
the
elimination
of
intersegment revenues).
Japan
Thousands
of
units
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Toyota’s consolidated vehicle unit
sales*
...............
4,284
3,853
(431)
(10.0)%
*
including number of exported
vehicle unit sales
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Sales of products
..............................
16,197,556
14,674,496
(1,523,060)
(9.4)%
Financial services
..............................
244,296
274,435
30,139
12.3
Total
....................................
16,441,852
14,948,931
(1,492,921)
(9.1)%
Sales
revenues
in
Japan
decreased
due
primarily
to
the
431
thousand
vehicles
decrease
in
vehicle
unit
sales
compared
with
the
prior
fiscal
year.
For
fiscal
2020
and
2021,
exported
vehicle
unit
sales
were
2,044
thousand
units and 1,728 thousand units, respectively.
62
North
America
Thousands
of
units
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
2,713
2,313
(400)
(14.8)%
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Sales of products
..............................
9,089,289
7,995,051
(1,094,238)
(12.0)%
Financial services
..............................
1,552,745
1,496,752
(55,993)
(3.6)
Total
....................................
10,642,034
9,491,803
(1,150,231)
(10.8)%
Sales
revenues
in
North
America
decreased
due
primarily
to
the
400
thousand
vehicles
decrease
in
vehicle
unit sales compared with the prior
fiscal year.
Europe
Thousands
of
units
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
1,029
959
(70)
(6.8)%
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Sales of products
..............................
3,206,943
2,976,259
(230,683)
(7.2)%
Financial services
..............................
148,414
158,229
9,815
6.6
Total
....................................
3,355,357
3,134,489
(220,868)
(6.6)%
Sales
revenues
in
Europe
decreased
due
primarily
to
the
70
thousand
vehicles
decrease
in
vehicle
unit
sales
compared with the prior fiscal
year.
Asia
Thousands
of
units
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
1,600
1,222
(378)
(23.6)%
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Sales of products
..............................
5,120,384
4,874,746
(245,638)
(4.8)%
Financial services
..............................
172,847
170,549
(2,298)
(1.3)
Total
....................................
5,293,231
5,045,295
(247,936)
(4.7)%
63
Sales
revenues
in
Asia
decreased
due
primarily
to
the
378
thousand
vehicles
decrease
in
vehicle
unit
sales
compared with the prior fiscal
year.
Other
Thousands
of
units
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Toyota’s consolidated vehicle unit
sales
................
1,372
1,027
(345)
(25.2)%
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Sales revenues:
Sales of products
..............................
1,941,859
1,719,132
(222,728)
(11.5)%
Financial services
..............................
172,252
153,764
(18,488)
(10.7)
Total
....................................
2,114,111
1,872,895
(241,216)
(11.4)%
Sales
revenues
in
Other
decreased
due
primarily
to
the
345
thousand
vehicles
decrease
in
vehicle
unit
sales
compared with the prior fiscal
year.
Operating
Costs
and
Expenses
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Operating costs and expenses
Cost of products sold
...........................
23,103,596
21,199,890
(1,903,706)
(8.2)%
Cost of financial services
........................
1,381,755
1,182,330
(199,424)
(14.4)
Selling, general and administrative
................
2,981,965
2,634,625
(347,339)
(11.6)
Total
....................................
27,467,315
25,016,845
(2,450,470)
(8.9)%
Yen
in
millions
2021
v.
2020
Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit
sales and sales mix
.............................
(1,330,000)
Effect of changes in exchange rates
..........................................
(305,000)
Effect of decrease of cost of financial
services
..................................
(175,500)
Effect of cost reduction efforts
..............................................
(150,000)
Increase or decrease in expenses
and expense reduction efforts
....................
(70,000)
Other
..................................................................
(419,970)
Total
..............................................................
(2,450,470)
Operating costs
and expenses
decreased by
¥2,450.4 billion, or
8.9%, to ¥25,016.8 billion
during fiscal
2021
compared with the prior fiscal
year.
Cost
Reduction
Efforts
During
fiscal
2021,
continued
cost
reduction
efforts
together
with
suppliers
contributed
to
a
reduction
of
operating costs
and
expenses
by ¥150.0
billion.
This was due
to ¥80.0
billion in
cost reduction
efforts
concerning
64
design related costs
due mainly
to ongoing value engineering
activities,
and ¥70.0 billion
in cost reduction efforts
at plants and logistics departments.
These
cost
reduction
efforts
related
to
ongoing
value
engineering
and
value
analysis
activities,
the
use
of
common
parts
resulting
in
a
reduction
of
part
types
and
other
manufacturing
initiatives
designed
to
reduce
the
costs
of
vehicle
production.
The
amount
of
the
effect
of
cost
reduction
efforts
includes
the
impact
of
fluctuation
in
the
price
of
steel,
precious
metals,
non-ferrous
alloys
including
aluminum,
plastic
parts
and
other
production
materials and parts.
Cost
of
Products
Sold
Cost
of
products
sold
decreased
by
¥1,903.7
billion,
or
8.2%,
to
¥21,199.8
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
mainly
reflected
the
impact
of
changes
in
vehicle
unit
sales
and
sales
mix,
the
impact
of
deconsolidation
of
certain
entities
due
to
changes
in
ownership
interest,
the
favorable impact of fluctuations
in foreign currency translation
rates, and the impact
of cost reduction efforts.
Cost
of
Financial
services
Cost
of
financial
services
decreased
by
¥199.4
billion,
or
14.4%,
to
¥1,182.3
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
The
decrease
resulted
mainly
from
the
decrease
in
expenses
related
to
residual value losses and the decrease
in funding costs resulting
from lower interest rates.
Selling,
General
and
Administrative
Expenses
Selling,
general
and
administrative
expenses
decreased
by
¥347.3
billion,
or
11.6%,
to
¥2,634.6
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
mainly
reflected
the
impact
of
deconsolidation
of
certain
entities
due
to
changes
in
ownership
interest,
the
decrease
in
advertising
costs,
and
the
favorable impact of fluctuations
in foreign currency translation
rates.
Operating
Income
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing activities
...............................................
(210,000)
Effect of cost reduction efforts
..............................................
150,000
Effect of changes in exchange rates
..........................................
(255,000)
Increase or decrease in expenses
and expense reduction efforts
....................
70,000
Other
..................................................................
43,516
Total
..............................................................
(201,484)
Toyota’s
operating
income
decreased
by
¥201.4
billion,
or
8.4%,
to
¥2,197.7
billion
during
fiscal
2021
compared with the
prior fiscal
year. This decrease
was due to the
¥255.0 billion unfavorable
impact
of changes in
exchange
rates
and
the
¥210.0
billion
impact
of
marketing
activities,
partially
offset
by
the
¥150.0
billion
increase in cost reduction efforts
and the ¥70.0 billion increase
in expenses and expense reduction efforts.
Marketing
efforts
and
marketing
activities
include
changes
in
vehicle
unit
sales
and
sales
mix,
sales
expenses and other. “Other” includes valuation
gains and losses from interest
rate swaps etc.
The
unfavorable
impact
of
changes
in
exchange
rates
was
due
mainly
to
the
¥210.0
billion
impact
of
overseas transactions such as imports
and exports denominated in
foreign currencies.
65
During
fiscal
2021,
operating
income
(before
elimination
of
intersegment
profits)
compared
with
the
prior
fiscal
year
decreased
by
¥436.0
billion,
or
27.5%,
in
Japan,
¥35.8 billion,
or
24.9%,
in
Europe,
and
¥24.1
billion,
or
28.8%,
in
Other,
and
increased
by
¥148.1
billion,
or
58.5%,
in
North
America,
and ¥72.3
billion,
or
19.9%,
in
Asia.
The following is a description of operating
income in each geographic market.
Japan
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing activities
...............................................
(475,000)
Effect of cost reduction efforts
..............................................
125,000
Effect of changes in exchange rates
..........................................
(170,000)
Increase or decrease in expenses
and expense reduction efforts
....................
65,000
Other
..................................................................
18,941
Total
..............................................................
(436,059)
North
America
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
150,000
Effect of cost reduction efforts
..............................................
10,000
Effect of changes in exchange rates
..........................................
(20,000)
Increase or decrease in expenses
and expense reduction efforts
....................
(50,000)
Other
..................................................................
58,156
Total
..............................................................
148,156
Europe
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
15,000
Effect of cost reduction efforts
..............................................
0
Effect of changes in exchange rates
..........................................
(50,000)
Increase or decrease in expenses
and expense reduction efforts
....................
15,000
Other
..................................................................
(15,846)
Total
..............................................................
(35,846)
66
Asia
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
20,000
Effect of cost reduction efforts
..............................................
20,000
Effect of changes in exchange rates
..........................................
10,000
Increase or decrease in expenses
and expense reduction efforts
....................
10,000
Other
..................................................................
12,393
Total
..............................................................
72,393
Other
Yen
in
millions
2021
v.
2020
Change
Changes in operating income and loss:
Effect of marketing efforts
.................................................
80,000
Effect ofcost reduction efforts
...............................................
(5,000)
Effect of changes in exchange rates
..........................................
(25,000)
Increase or decrease in expenses
and expense reduction efforts
....................
(40,000)
Other
..................................................................
(34,154)
Total
..............................................................
(24,154)
Other
Income
and
Expenses
Share
of
profit
(loss)
of
investments
accounted
for
using
the
equity
method
during
fiscal
2021
increased
by
¥40.7 billion,
or
13.1%, to
¥351.0
billion
compared with
the
prior
fiscal
year. This
increase
was
due mainly
to
an
increase
during
fiscal
2021
in
net
income
attributable
to
the
shareholders
of
companies
accounted
for
by
the
equity method.
Other
finance
income
increased
by
¥129.3
billion,
or
42.3%,
to
¥435.2
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
increase
was
due
mainly
to
an
increase
during
fiscal
2021
in
profit
on
securities
revaluation.
Other finance
costs increased
by ¥0.3
billion,
or 0.8%, to
¥47.5 billion
during fiscal
2021 compared
with the
prior fiscal year.
Foreign
exchange
gain
(loss),
net
increased
by
¥109.7
billion
to
¥15.1
billion
during
fiscal
2021
compared
with the
prior
fiscal
year.
Foreign
exchange
gains
and
losses
include
the
differences
between the
value
of
foreign
currency
denominated
assets
and
liabilities
recognized
through
transactions
in
foreign
currencies
translated
at
prevailing
exchange
rates
and
the
value
at
the
date
the
transaction
settled
during
the
fiscal
year,
including
those
settled
using
forward
foreign
currency
exchange
contracts,
or
the
value
translated
by
appropriate
year-end
exchange
rates.
The
¥109.7
billion
increase
in
foreign
exchange
gain
(loss),
net
was
due
mainly
to
the
losses
recorded
in
fiscal
2020
resulting
from
the
Japanese
yen
being
stronger
against
foreign
currencies
at
the
maturity
dates of the foreign currency loans
than at the dates of the lending.
Other
income
(loss),
net
increased
by
¥61.3
billion,
to
¥19.2
billion
in
losses
during
fiscal
2021
compared
with the prior fiscal year.
67
Income
Taxes
The
provision
for
income
taxes
decreased
by
¥31.8
billion,
or
4.7%,
to
¥649.9
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
was
due
mainly
to
the
increased
proportion
of
income
before
income
taxes
of
foreign
subsidiaries
where
statutory
tax
rates
are
low.
The
average
effective
tax
rate
for
fiscal
2021 was 22.2%.
Net
Income
Attributable
to
Noncontrolling
Interests
Net
income
attributable
to
non-controlling
interests
decreased
by
¥37.8
billion,
or
50.5%,
to
¥37.1
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
was
due
mainly
to
a
decrease
during
fiscal
2021 in net income of consolidated subsidiaries.
Net
Income
Attributable
to
Toyota
Motor
Corporation
Net
income
attributable
to
Toyota
Motor
Corporation
increased
by
¥209.1
billion,
or
10.3%,
to
¥2,245.2 billion during fiscal 2021 compared
with the prior fiscal year.
Other
Comprehensive
Income,
Net
of
Tax
Other
comprehensive
income,
net
of
tax
increased
by
¥1,521.1
billion
to
¥1,012.4
billion
for
fiscal
2021
compared
with
the
prior
fiscal
year.
This
increase
resulted
from
exchange
differences
on
translating
foreign
operations
gains
of
¥403.6
billion
in
fiscal
2021
compared
with
losses
of
¥362.0
billion
in
the
prior
fiscal
year.
This
was
due
mainly
to
the
weakening
of
the
yen
against
the
U.S.
dollar
and
the
euro,
net
changes
in
revaluation
of
financial
assets
measured
at
fair
value
through
other
comprehensive
income
gains
of
¥303.9
billion
in
fiscal
2021
compared
with
losses
of
¥130.4
billion
in
the
prior
fiscal
year,
due
mainly
to
changes
in
prices
of
marketable
stocks
in
stock
exchange
markets,
and
remeasurements
of
defined
benefit
plans
gains
in
fiscal
2021
of
¥216.2
billion
compared
with
losses
of
¥43.3
billion
in
the
prior
fiscal
year,
due
mainly
to
changes
in
fair
value of plan assets.
Segment
Information
The
following
is
a
discussion
of
the
results
of
operations
for
each
of
Toyota’s
operating
segments.
The
amounts presented are prior to
intersegment elimination.
Yen
in
millions
Year
ended
March
31,
2021
v.
2020
Change
2020
2021
Amount
Percentage
Automotive:
Sales revenues
................................
26,799,743
24,651,552
(2,148,191)
(8.0)%
Operating income
..............................
2,013,134
1,607,161
(405,973)
(20.2)
Financial Services:
Sales revenues
................................
2,193,170
2,162,237
(30,933)
(1.4)
Operating income
..............................
283,742
495,593
211,851
74.7
All Other:
Sales revenues
................................
1,504,920
1,052,365
(452,555)
(30.1)
Operating income
..............................
103,356
85,350
(18,006)
(17.4)
Intersegment elimination/unallocated
amount:
Sales revenues
................................
(631,286)
(651,560)
(20,274)
Operating income
..............................
(999)
9,645
10,645
Automotive
Operations
Segment
The automotive
operations
segment
is
Toyota’s
largest
operating
segment
by
sales
revenues.
Sales
revenues
for
the
automotive
segment
decreased
during
fiscal
2021
by
¥2,148.1
billion,
or
8.0%,
to
¥24,651.5
billion
68
compared
with
the
prior
fiscal
year.
The
decrease
mainly
reflects
the
¥2,080.0
billion
unfavorable
impact
of
changes
in
vehicle
unit
sales
and
sales
mix
and
the
¥560.0
billion
unfavorable
impact
of
changes
in
exchange
rates.
Operating income
from
the automotive
operations
decreased by
¥405.9 billion,
or 20.2%,
to ¥1,607.1
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
in
operating
income
was
due
mainly
to
the
¥375.0
billion
effect
of
marketing
activities
and
the
¥255.0
billion
unfavorable
impact
of
changes
in
exchange
rates,
partially
offset
by
the
¥150.0
billion
impact
of
cost
reduction
efforts
and
the
¥70.0
billion
decrease
in
expenses and expense reduction efforts.
Financial
Services
Operations
Segment
Sales
revenues
for
the
financial
services
operations
decreased
during
fiscal
2021
by
¥30.9
billion,
or
1.4%,
to
¥2,162.2
billion
compared
with
the
prior
fiscal
year.
This
decrease
was
due
mainly
to
the
unfavorable
impact
of changes in exchange rates.
Operating income from
financial services
operations
increased by ¥211.8
billion, or 74.7%, to ¥495.5 billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
increase
was
due
primarily
to
the
decrease
in
expenses
related
to
credit
losses
and
residual
value
losses,
and
the
recording
of
valuation
gains
on
interest
rate
swaps stated at fair value in sales
finance subsidiaries.
All
Other
Operations
Segment
Sales
revenues
for
Toyota’s
other
operations
segments
decreased
by
¥452.5
billion,
or
30.1%,
to
¥1,052.3
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
was
mainly
due
to
the
full-year
impact
of
THC
and
Misawa
Homes
no
longer
being
Toyota’s
consolidated
subsidiary
companies
as
of
January
2020.
Operating
income
from
Toyota’s
other
operations
segments
decreased
by
¥18.0
billion,
or
17.4%,
to
¥85.3
billion
during
fiscal
2021
compared
with
the
prior
fiscal
year.
This
decrease
includes
the
negative
impact
caused by THC and Misawa Homes no longer being Toyota’s consolidated
subsidiary companies.
Related
Party
Transactions
See note 32 to the consolidated financial
statements for further
discussion.
Basic
Concept
Regarding
the
Selection
of
Accounting
Standards
TMC
has
adopted
IFRS
for
its
consolidated
financial
statements
in
order
to
improve
the
international
comparability
of
its
financial
information
in
the
capital
markets,
among
other
reasons,
beginning
with
the
first
quarter of the fiscal year
ended March 31, 2021.
Outlook
As
the
automotive
industry
faces
a
once-in-a-century
transformational
period
and
at
a
time
when
the
right
answers
are
elusive,
we
are
committed
to
“Producing
Happiness
for
All”
together
with
our
stakeholders,
underpinned
by
the
spirit
of
“For
the
Sake
of
Others”
which
we
have
maintained
since
our founding.
We
believe
management
practices
that
value
what
makes
us
Toyota
will
lead
to
sustained
efforts
to
achieve
the
aims
of
the
SDGs
to
“build
a
better
world”
while
ensuring
that
“no
one
will
be
left
behind.”
We
are
accelerating
our
shift
toward
product-centered
management
under
the
“making
ever-better
cars”
initiative,
efforts
to
achieve
carbon
neutrality,
and
endeavors
to
develop
essential
technologies
such
as
software
and
connected
vehicles.
Taking
the
foregoing
external
factors
and
other
factors
into
account,
Toyota
expects
that
sales
revenues
for
fiscal
2023
will
69
increase compared
with fiscal 2022
due mainly to
the increase in
vehicle unit
sales. Toyota expects that
operating
income
will
decrease
in
fiscal
2023
compared
with
fiscal
2022
due
mainly
to
the
unfavorable
impact
of
soaring
materials
prices,
partially
offset
by
the
increase
in
vehicle
unit
sales.
Toyota
expects
that
income
before
income
taxes
and
net
income
attributable
to
Toyota
Motor
Corporation
will
also
decrease
in
fiscal
2023
compared
with
fiscal 2022.
For
the
purposes
of
this
outlook
discussion,
Toyota
is
assuming
an
average
exchange
rate
of
¥115
to
the
U.S.
dollar
and
¥130
to
the
euro.
Exchange
rate
fluctuations
can
materially
affect
Toyota’s
operating
results.
In
particular,
a
strengthening
of
the
Japanese
yen
against
the
U.S.
dollar
can
have
a
material
adverse
effect
on
Toyota’s
operating
results.
See
“Operating
and
Financial
Review
and
Prospects
Operating
Results
Overview — Currency Fluctuations” for further
discussion.
The
foregoing
statements
are
forward-looking
statements
based
upon
Toyota’s
management’s
assumptions
and beliefs
regarding
exchange
rates,
market
demand for
Toyota’s products,
economic
conditions and
others. See
“Cautionary
Statement
With
Respect
To
Forward-Looking
Statements”.
Toyota’s
actual
results
of
operations
could
vary
significantly
from
those
described
above
as
a
result
of
unanticipated
changes
in
the
factors
described
above or other factors, including
those described in “Risk Factors”.
5.B
LIQUIDITY
AND
CAPITAL
RESOURCES
Historically,
Toyota
has
funded
its
cash
requirements,
including
those
relating
to
capital
expenditures
as
well as its research and development
activities through cash generated
by operations.
In
fiscal
2023,
Toyota
expects
to
sufficiently
fund
its
cash
requirements,
including
those
relating
to
capital
expenditures
as
well
as
its
research
and
development
activities,
through
cash
and
cash
equivalents
on
hand,
cash
generated
by
operations,
the
issuance
of
corporate
bonds,
and
debt
financing.
Toyota
will
use
its
funds
to
efficiently
invest
in
maintenance
and
replacement
of
conventional
manufacturing
facilities
and
the
introduction
of
new
products,
and
will
focus
on
investment
in
areas
contributing
to
strengthening
competitiveness
and
future
growth
for
realization
of
a
new
mobility
society.
See
“Information
on
the
Company
Business
Overview
Capital
Expenditures
and
Divestitures”
for
information
regarding
Toyota’s
material
capital
expenditures
and
divestitures
for
fiscal
2021
and
2022,
and
information
concerning
Toyota’s
principal
capital
expenditures
and
divestitures currently in
progress.
Toyota
funds
its
financing
programs
for
customers
and
dealers,
including
loans
and
leasing
programs,
from
both
cash
generated
by
operations
and
borrowings
by
its
sales
finance
subsidiaries.
Toyota
seeks
to
expand
its
ability to raise funds locally
in markets throughout the world
by expanding its network of finance subsidiaries.
Net
cash
provided
by
operating
activities
increased
by
¥995.4
billion
to
¥3,722.6
billion
for
fiscal
2022,
compared
with
¥2,727.1
billion
for
fiscal
2021.
The
increase
was
primarily
attributable
to
the
¥592.2
billion
increase in net income.
Net
cash
used
in
investing
activities
decreased
by
¥4,106.6
billion
to
¥577.4
billion
for
fiscal
2022,
compared
with
¥4,684.1
billion
for
fiscal
2021.
The
decrease
was
primarily
attributable
to
the
¥3,770.9
billion
decrease
in
time
deposits,
which
was
largely
attributable
to
withdrawals
from
time
deposits
that
were
funded
from
debt
financing
that
was
conducted
taking
into
account
the
risk
that
COVID-19
will
have
a
prolonged
impact.
Net
cash
used
in
financing
activities
was
¥2,466.5
billion
for
fiscal
2022,
compared
with
net
cash
provided
by
financing
activities
of
¥2,739.1
billion
for
fiscal
2021,
a
¥5,205.6
billion
change.
The
change
was
primarily
attributable to the ¥1,533.5 billion
decrease in funding by long-term
debt.
Total capital
expenditures
for
property,
plant
and equipment,
including
vehicles and
equipment
on operating
leases,
were
¥3,611.5
billion
during
fiscal
2022,
remaining
largely
unchanged
from
the
¥3,609.6
billion
in
total
capital expenditures during the
prior fiscal year.
70
Toyota
expects
investments
in
property,
plant
and
equipment,
excluding
vehicles
and
equipment
on
operating leases, to be approximately
¥1,400.0 billion during fiscal
2023.
Cash
and
cash
equivalents
were
¥6,113.6
billion
as
of
March
31,
2022.
Most
of
Toyota’s
cash
and
cash
equivalents are held in Japanese
yen or in U.S. dollars.
Liquid
assets,
which
Toyota
defines
as
cash
and cash
equivalents,
time deposits,
public and
corporate
bonds
and
its
investment
in
monetary
trust
funds
decreased
during
fiscal
2022,
by
¥761.1
billion,
or
5.4%,
to
¥13,451.0 billion as of March 31, 2022.
Trade
accounts
and
notes
receivable,
less
allowance
for
doubtful
accounts
increased
during
fiscal
2021
by
¥184.0 billion,
or
6.2%,
to
¥3,142.8
billion.
This
increase
was
due
mainly to
increased
revenue
from
sales during
the quarter ended March 31, 2022.
Inventories
increased
during
fiscal
2022
by
¥933.3
billion,
or
32.3%,
to
¥3,821.3
billion.
This
increase
was
due mainly to an increase in unit
prices attributable to rising
prices in the precious
metal market.
Total
finance
receivables,
net
increased
during
fiscal
2022
by
¥2,558.7
billion,
or
13.3%,
to
¥21,764.4
billion.
This
increase
was
due
mainly
to
an
increase
in
the
impact
of
changes
in
exchange
rates.
Finance
receivables
were
geographically
distributed
as
follows:
in
North
America
55.0%,
in
Asia
12.9%,
in
Europe 13.3%, in Japan 7.3% and in Other 11.5%.
Other
financial
assets
decreased
during
fiscal
2022
by
¥1,274.8
billion,
or
9.6%.
This
decrease
was
due
mainly to a decrease in time
deposits and other factors.
Property,
plant
and
equipment
increased
during
fiscal
2022
by
¥915.4
billion,
or
8.0%.
This
increase
was
due mainly to capital expenditures.
Accounts and notes payable increased during
fiscal 2022 by ¥246.1 billion, or 6.1%.
Income
taxes
payable
increased
during
fiscal
2022
by
¥475.9
billion,
or
135.6%.
This
increase
was
mainly
due to an increase in income before
income taxes that led to increased
income tax expense.
Toyota’s
total
borrowings
increased
during
fiscal
2022
by
¥836.7
billion,
or
3.3%.
Toyota’s
short-term
borrowings
consist
of
loans
with
a
weighted-average
interest
rate
of
1.64%
and
commercial
paper
with
a
weighted-average
interest
rate
of
0.38%.
Short-term
borrowings
decreased
during
fiscal
2022
by
¥235.0
billion,
or
5.4%,
to
¥4,104.8
billion.
Toyota’s
long-term
debt
consists
of
unsecured
and
secured
loans,
medium-term
notes,
unsecured
and
secured
notes
etc.
with
weighted-average
interest
rates
ranging
from
1.02%
to
5.81%,
and
maturity
dates
ranging
from
2022
to 2048.
The
current
portion
of
long-term
debt
decreased during
fiscal
2022
by
¥557.4
billion,
or
7.4%,
to
¥7,026.8
billion
and
the
non-current
portion
increased
by
¥1,809.9
billion,
or
13.8%,
to
¥14,943.7
billion.
The
increase
in
total
borrowings
resulted
mainly
from
the
increasing
demand
for
financing
associated
with
the
increase
in
the
loan
balance
at
financial
subsidiaries.
As
of
March
31,
2022,
approximately
52%
of
long-term
debt
was
denominated
in
U.S.
dollars,
11%
in
Japanese
yen,
13%
in
euros,
6%
in
Australian
dollars,
4%
in
Canadian
dollars,
and
14%
in
other
currencies.
Toyota
hedges
interest
rate
risk
exposure
of
fixed-
rate
borrowings
by
entering
into
interest
rate
swaps.
There
are
no
material
seasonal
variations
in
Toyota’s
borrowings requirements.
As
of
March
31,
2022,
Toyota’s
total
interest
bearing
debt
was
101.0%
of
Toyota
Motor
Corporation
shareholders’ equity, compared
with 109.6% as of March 31, 2021.
The
following
table
provides
information
on
credit
ratings
of
Toyota’s
short-term
borrowing
and
long-term
debt
from
Standard
&
Poor’s
Ratings
Group
(S&P),
Moody’s
Investors
Services
(Moody’s),
and
Rating
and
71
Investment
Information,
Inc.
(R&I),
as
of
May
31,
2022.
A
credit
rating
is
not
a
recommendation
to
buy,
sell
or
hold
securities.
A
credit
rating
may
be
subject
to
withdrawal
or
revision
at
any
time.
Each
rating
should
be
evaluated separately of any other
rating.
S&P
Moody’s
R&I
Short-term borrowing
.....
A-1+
P-1
Long-term debt
..........
A
+
A
1
A
A
A
Toyota’s net
defined
benefit liability
(asset)
of
Japanese plans
decreased during
fiscal
2022 by
¥50.6 billion,
or
17.9%,
to
¥232.3
billion.
The
net
defined
benefit
liability
(asset)
of
foreign
plans
decreased
during
fiscal
2022
by
¥77.4
billion,
or
22.7%,
to
¥262.9
billion.
The
amounts
of
net
defined
benefit
liability
(asset)
will
be
funded
through
future
cash
contributions
by
Toyota
or
in
some
cases
will
be
settled
on
the
retirement
date
of
each
covered
employee.
The
decrease
in
net
defined
benefit
liability
(asset)
of
the
Japanese
plans
reflects
mainly
an
increase
in
plan
assets
that
resulted
from
an
increase
in
stock
prices.
See
note
23
to
the
consolidated
financial
statements for further
discussion.
Toyota’s
treasury
policy
is
to
maintain
controls
on
all
exposures,
to
adhere
to
stringent
counterparty
credit
standards,
and
to
actively
monitor
marketplace
exposures.
Toyota
remains
centralized,
and
is
pursuing
global
efficiency of its financial
services operations through
Toyota Financial Services Corporation.
The
key
element
of
Toyota’s
financial
strategy
is
maintaining
a
strong
financial
position
that
will
allow
Toyota
to
fund
its
research
and
development
initiatives,
capital
expenditures
and
financial
services
operations
efficiently
even
if
earnings
are
subject
to
short-term
fluctuations.
Toyota
believes
that
it
maintains
sufficient
liquidity
for
its
present
cash
requirements
and
that,
by
maintaining
its
high
credit
ratings,
it
will
continue
to
be
able
to
access
funds
from
external
sources
in
large
amounts
and
at
relatively
low
costs.
Toyota’s
ability
to
maintain
its
high
credit
ratings
is
subject
to
a
number
of
factors,
some
of
which
are
not
within
Toyota’s
control.
These
factors
include
general
economic
conditions
in
Japan
and
the
other
major
markets
in
which
Toyota
does
business, as well as Toyota’s successful
implementation of its
business strategy.
Toyota
uses
its
securitization
program
as
part
of
its
funding
through
special
purpose
entities
for
its
financial
services
operations.
Toyota
is
considered
as
the
primary
beneficiary
of
these
special
purpose
entities
and
therefore
consolidates
them.
Toyota
has
not
entered
into
any
off-balance
sheet
securitization
transactions
during
fiscal 2022.
For
information
regarding
the
amounts
of
non-derivative
financial
liabilities
and
derivative
financial
liabilities
by
a
remaining
contract
maturity
period,
see
note
19
to
the
consolidated
financial
statements.
In
addition, as
part
of
Toyota’s normal
business
practices,
Toyota
enters into
long-term
arrangements with
suppliers
for
purchases
of
certain
raw
materials,
components
and
services.
These
arrangements
may
contain
fixed/
minimum
quantity
purchase
requirements.
Toyota
enters
into
such
arrangements
to
facilitate
an
adequate
supply
of these materials and services.
72
The
following
tables
summarize
Toyota’s
contractual
obligations
and
commercial
commitments
as
of
March 31, 2022.
Yen
in
millions
Total
Payments
Due
by
Period
Less
than
1
year
1t
o
3
years
3t
o
5
years
5
years
and
after
Contractual Obligations:
Short-term debt
..........................
4,104,858
4,104,858
Long-term debt
..........................
22,391,500
7,082,981
8,937,246
4,447,945
1,923,328
Commitments for the purchase
of property,
plant, other assets and services
(note 30)
....
349,143
201,482
89,695
40,423
17,543
Total
..............................
26,845,501
11,389,321
9,026,941
4,488,368
1,940,871
Commercial Commitments (note
30):
Maximum potential exposure to
guarantees
given in the ordinary course of business
.....
3,641,978
939,994
1,631,204
975,963
94,817
Total
..............................
3,641,978
939,994
1,631,204
975,963
94,817
*
“Long-term debt” represents
future principal
payments.
Toyota expects
to contribute
¥33,069 million
domestically
and ¥14,876
million
overseas to
its pension
plans
in fiscal 2023.
Lending
Commitments
Credit
Facilities
with
Credit
Card
Holders
Toyota’s
financial
services
operations
issue
credit
cards
to
customers.
As
customary
for
credit
card
businesses,
Toyota
maintains
credit
facilities
with
holders
of
credit
cards
issued
by
Toyota.
These
facilities
are
used
upon
each
holder’s
requests
up
to
the
limits
established
on
an
individual
holder’s
basis.
Although
loans
made
to
customers
through
these
facilities
are
not
secured,
for
the
purposes
of
minimizing
credit
risks
and
of
appropriately
establishing
credit
limits
for
each
individual
credit
card
holder,
Toyota
employs
its
own
risk
management
policy
which
includes
an
analysis
of
information
provided
by
financial
institutions
in
alliance
with
Toyota.
Toyota
periodically
reviews
and
revises,
as
appropriate,
these
credit
limits.
Outstanding
credit
facilities
with credit card holders were ¥179.2 billion
as of March 31, 2022.
Credit
Facilities
with
Dealers
Toyota’s
financial
services
operations
maintain
credit
facilities
with
dealers.
These
credit
facilities
may
be
used
for
business
acquisitions,
facilities
refurbishment,
real
estate
purchases,
and
working
capital
requirements.
These loans
are
typically
collateralized
with liens
on real
estate,
vehicle inventory,
and/or
other dealership
assets,
as
appropriate.
Toyota
obtains
a
personal
guarantee
from
the
dealer
or
corporate
guarantee
from
the
dealership
when
deemed
prudent.
Although
the
loans
are
typically
collateralized
or
guaranteed,
the
value
of
the
underlying
collateral
or
guarantees
may
not
be
sufficient
to
cover
Toyota’s
exposure
under
such
agreements.
Toyota
evaluates
the
credit
facilities
according
to
the
risks
assumed
in
entering
into
the
credit
facility.
Toyota’s financial
services
operations
also
provide
financing
to
various
multi-franchise
dealer
organizations,
referred
to
as
dealer
groups,
often
as
part
of
a
lending
consortium,
for
wholesale
inventory
financing,
business
acquisitions,
facilities
refurbishment, real
estate purchases,
and working capital
requirements. Toyota’s
outstanding credit facilities
with
dealers totaled ¥3,839.1 billion as
of March 31, 2022.
73
Guarantees
Toyota
enters
into
certain
guarantee
contracts
with
its
dealers
to
guarantee
customers’
payments
of
their
installment
payables
that
arise
from
installment
contracts
between
customers
and
Toyota
dealers,
as
and
when
requested
by
Toyota
dealers.
Guarantee
periods
are
set
to
match
the
maturity
of
installment
payments,
and
as
of
March
31,
2022,
ranged
from
one
month
to
8
years.
However,
they
are
generally
shorter
than
the
useful
lives
of
products
sold.
Toyota
is
required
to
execute
its
guarantee
primarily
when
customers
are
unable
to
make
required
payments.
The
maximum
potential
amount
of
future
payments
as
of
March
31,
2022
is
¥3,641.9
billion.
Liabilities
for
these
guarantees
of
¥21.8
billion
have
been
provided
as
of
March
31,
2022.
Under
these
guarantee
contracts,
Toyota is entitled to recover any amounts
paid by it from the customers
whose obligations it guaranteed.
5.C
RESEARCH
AND
DEVELOPMENT,
PATENTS
AND
LICENSES
Toyota’s
research
and
development
is
dedicated
to
capturing
the
increasingly
diverse
and
sophisticated
market
through
the
development
of
attractive,
affordable,
high-quality
products
for
customers
worldwide.
The
intellectual
property
that
R&D
generates
is
a
vital
management
resource
that
Toyota
utilizes
and
protects
to
maximize
its
corporate
value.
For
a
more
detailed
discussion
of
the
company’s
research
and
development
objectives
and
policies,
see
“Information
on
the
Company
Business
Overview
Research
and
Development.”
Toyota’s
research
and
development
expenditures
were
approximately
¥1,124.2
billion
in
fiscal
2022,
¥1,090.4 billion in fiscal 2021 and ¥1,110.3 billion
in fiscal 2020.
Toyota
presents
research
and
development
expenditures
as
a
supplemental
measure
that
demonstrates
the
amount
of
research
and
development
expenditures
undertaken
during
the
relevant
reporting
period.
Toyota
defines
research
and
development
expenditures
as
research
and
development
cost,
plus
research
and
development-related
expenditures
that
were
recognized
as
intangible
assets,
less
amortization
expenses
for
such
assets.
This
measure
has
limitations
as
an
analytical
tool,
and
you
should
not
consider
it
in
isolation,
or
as
a
substitute for an analysis of
Toyota’s research and development cost
as reported under IFRS.
For
details
of
the
research
and
development
cost
recorded
in
the
consolidated
statement
of
income,
see
note
27 to the consolidated financial
statements.
Toyota
operates
a
global
research
and
development
organization
with
the
primary
goal
of
building
automobiles
that
meet
the
needs
of
customers
in
every
region
of
the
world.
In
Japan,
research
and
development
operations
are
led
by
Toyota
and
Toyota
Central
Research
&
Development
Laboratories,
Inc.,
which
works
closely with
Daihatsu, Hino,
Toyota Auto
Body Co., Ltd.,
Toyota Motor
East Japan,
Inc., and
many other
Toyota
group
companies.
Overseas,
Toyota
has
a
worldwide
network
of
technical
centers
as
well
as
design
and
motorsports research and development
centers.
Toyota
established
TRI
in
January
2016
to
accelerate
research
and
development
of
artificial
intelligence
technology,
which
has
significant
potential
to
support
future
industrial
technologies.
In
July
2017,
TRI
invested
$100
million
to
launch
a
venture
capital
fund
designed
to
provide
financing
to
startup
companies,
and
is
making
investments
in newly
established
promising
startup
companies in
the four
areas of
artificial
intelligence,
robotics,
autonomous
mobility,
and
data
and
cloud
technology.
TRI
successively
invested
another
$100
million
in
May
2019
and
$150
million
in
June
2021.
In
addition,
TRI
established
a
$150
million
fund
in
an
aim
to
achieve
carbon neutrality.
In
Japan,
Toyota
established
a
new
company,
Toyota
Research
Institute
Advanced
Development
(“TRI-AD”),
in
March
2018
to
further
accelerate
its
efforts
in
advanced
development
for
automated
driving
technology and
related technologies.
Its
key objectives
include creating
a smooth software
pipeline from
research
to
commercialization,
leveraging
data-handling
capabilities,
strengthening
collaboration
in
development
within
74
the
Toyota
group,
including
TRI,
to
accelerate
development,
and
recruiting
and
employing
top-level
engineers
globally, while
cultivating
and
coordinating
strong
talent within
the
Toyota
group. In
January
2021, TRI-AD was
reorganized
into
Woven
Planet
Group
comprising
four
companies—Woven
Planet
Holdings,
Inc.,
which
is
responsible
for
decision-making
for
the
entire
group
and
creates
new
business
opportunities;
Woven
Core,
Inc.,
which
assumed
the
business
of
TRI-AD
and
is
responsible
for
the
development
of
automated
driving
technologies;
Woven
Alpha,
Inc.,
which
is
responsible
for
the
development
of
new
projects
such
as
Woven
City
and
Arene,
a
software
platform;
and
Woven
Capital,
L.P.
with
a
total
investment
value
of
$800
million,
which
invests in growth-stage
companies in
areas such as
autonomous driving mobility,
artificial
intelligence, and
smart
city.
Moreover,
to
bolster
overseas
research
and
development
initiatives
related
to
automated
driving
technology
and
software
platforms,
Toyota
established
Woven
Planet
North
America
(WPNA)
in
the
United
States
and
Woven
Planet
United
Kingdom
in
the
United
Kingdom,
and
transferred
TRI’s
automated
driving
division
to
WPNA in May 2022.
Toyota also
established
a technical
development
center
in
Otemachi,
Tokyo, Japan
in
October 2018
as
a site
for development of
key IT technologies
that will
support automated driving
in collaboration
with Woven Core, as
well as promotion of collaboration
with venture companies and creation
of new value by utilizing big data.
The following table provides information
on Toyota’s principal research
and development facilities.
Facility
Principal
Activity
Japan
Toyota Technical Center
................
Product planning, style, design, prototype production and
vehicle evaluation
Higashi-Fuji Technical Center
...........
Advanced development
Tokyo Design Research & Laboratory
.....
Advanced styling designs
Woven Core, Inc.
.....................
Development of artificial
intelligence
technology with a
focus on automated driving technology
Woven Alpha, Inc.
....................
Development of Woven
City and software platform
technologies
Otemachi Office
......................
Development of key IT technologies, creation of new values
by utilizing big data and collaboration
with venture
companies
Shibetsu Proving Ground
...............
Evaluation
Toyota Central R&D Labs., Inc.
..........
Basic research
United
States
Toyota Motor Engineering and
Manufacturing North America, Inc.
.....
Product planning, design and evaluation of vehicles
manufactured in North America
Calty Design Research, Inc.
.............
Design
Toyota Research Institute of North America
(TRI-NA)
.........................
Advanced research relating to “energy and environment,”
“safety” and “mobility infrastructure”
Toyota Research Institute, Inc.
...........
Research and development of artificial
intelligence
technology
Woven Planet North America, Inc.
........
Development of automated driving technology and software
platform technology
75
Facility
Principal
Activity
Europe
Toyota Motor Europe NV/SA
............
Planning and evaluation of vehicles manufactured in Europe
Toyota Europe Design Development
S.A.R.L.
..........................
Design
Toyota Motorsport GmbH
..............
Development of motor sports vehicles
Woven Planet United Kingdom, Ltd.
......
Development of automated driving technology and software
platform technology
Asia
Pacific
Toyota Daihatsu Engineering and
Manufacturing Co., Ltd.
..............
Planning and evaluation of vehicles manufactured in
Australia and Asia
China
Toyota Motor Engineering and
Manufacturing (China) Co., Ltd.
.......
Environmental technology design and evaluation in China
FAW Toyota Research & Development Co.,
L
t
d
...............................
Design, evaluation and certification of vehicles
manufactured in China
GAC Toyota Motor Co., Ltd. R&D
Center
............................
Design, evaluation and certification of vehicles
manufactured in China
BYD Toyota EV Technology Co., Ltd.
....
Design and evaluation
of BEVs
Toyota Motor Technical Research and
Service (Shanghai) Co., Ltd.
...........
Research of new technology, construction and system of
automobiles
Toyota
carefully
analyzes
patents
and
the
need
for
patents
in
each
area
of
research
to
formulate
more
effective
research
and
development
strategies.
Toyota
identifies
research
and
development
projects
in
which
it
should build a strong global patent portfolio.
For
a
further
discussion
of
Toyota’s
intellectual
property,
see
“Information
on
the
Company
Business
Overview — Intellectual Property.”
5.D
TREND
INFORMATION
For a discussion
of
the trends
that affect
Toyota’s business and
operating results,
see “— Operating
Results”
and “— Liquidity and Capital Resources.”
5.E
CRITICAL
ACCOUNTING
ESTIMATES
Not applicable.
ITEM
6.
DIRECTORS,
SENIOR
MANAGEMENT
AND
EMPLOYEES
6.A
DIRECTORS
AND
SENIOR
MANAGEMENT
In
order
to
advance
its
transition
to
a
mobility
company,
Toyota
has
reflected
on
the
path
it
has
taken
thus
far
and
has
formulated
the
“Toyota
Philosophy”
as
a
roadmap
for
the
future.
Toyota’s
mission
is
“Producing
Happiness
for
All”
by
expanding
the
possibilities
of
people,
companies
and
communities
through
addressing
the
76
challenges
of
mobility
as
a
mobility
company.
In
order
to
do
so,
Toyota
will
continue
to
create
new
and
unique
value
with
various
partners
by
relentlessly
committing
towards
monozukuri
(manufacturing),
and
by
fostering
imagination for people and society.
Toyota
strives
to
provide
a
full
lineup
of
products
with
“good
quality
yet
affordable
prices”
globally
at
the
right
place
at
the
right
time,
and
offer
products
and
services
that
are
sympathetic
towards
customers
in
each
country
and
region,
through
the
initiative
of
“making
even
better
cars”
that
we
have
been
engaged
in
since
the
2008
financial
crisis.
In
order
to
meet
these
objectives,
following
the
introduction
of
“region-based
operations,”
the
“business
unit
system”
and
the
“in-house
company
system”
in
2011,
2013
and
2016,
respectively,
in
April
2017
Toyota
further
clarified
that,
for
the
purpose
of
further
accelerating
decision-making
and
operational
execution,
members
of the
board
of directors
are
responsible
for
decision-making
and
management
oversight
and
that
operating
officers
are
responsible
for
operational
execution.
Furthermore,
in
2018,
Toyota
changed
the
commencement
of
operating
officers’
terms
of
office
from
April
to
January,
reduced
corporate
strategy
functions
and restructured
the Japan Sales Business
Group based on regions rather
than sales channels in an effort
to enable
decision-making
closer
to
customers
and
the
field,
in
order
to
further
accelerate
execution
in
full
coordination
with
each
site.
In
2019,
in
order
to
further
advance
Toyota’s
“acceleration
of
management”
and
the
development
of
a
diverse
and
talented
workforce,
the
executive
structure
was
changed
to
be
composed
only
of
senior
managing
officers
and
people
of
higher
rank,
and
a
new
classification
called
“senior
professional/senior
management”
(
kanbushoku
)
grouped
and
replaced
the
following
titles
or
ranks:
managing
officers,
executive
general
managers,
(sub-executive
managerial
level)
senior
grade
1
and
senior
grade
2
managers,
and
grand
masters.
From
the
perspective
of
appointing
the
right
people
to
the
right
positions,
senior
professionals/senior
management
were
positioned
in
a
wide
range
of
posts,
from
those
of
chief
officer,
deputy
chief
officer,
plant
general
manager,
and
senior
general
manager
to
group
manager,
to
deal
with
management
issues
as
they
arise
and
to
strengthen
their
development
as
part
of
a
diverse
and
talented
workforce
through
on-site
learning
and
problem-solving
(
genchi
genbutsu
).
In
April
2020,
Toyota
consolidated
the
posts
of
executive
vice
president
and
operating
officer
into
the
post
of
operating
officer.
In
July
2020,
Toyota
further
clarified
the
roles
of
operating
officers.
Members
of
management
who,
together
with
the
president,
have
cross-functional
oversight
of
the
entire
company,
were
redefined
as
“operating
officers.”
In-house
company
presidents,
regional
CEOs,
and
chief
officers,
as
on-site
leaders
of
business
implementation
elements,
were
given
authority
while
being
consolidated
into
the
classification
of
“senior
professional/senior
management.”
The
roles
of
operating
officers
and
senior
professionals/senior
management
are
to
be
determined
where
and
as
needed,
and
persons
appointed
as
operating
officers
and
senior
professionals/senior
management
will
change
in
accordance
with
the challenges
faced
and
the
path
that
should
be
taken,
as
the
company
exercises
greater
flexibility
in
making
appointments.
However,
because of the rapidly changing
business environment, Toyota now recognizes
that there is an increasing
need for
such
executives
to
fulfill
management
roles
(related
to
people,
goods,
and
money)
together
with
President
Toyoda.
Therefore,
in
April
2022,
Toyota
reorganized
the
roles
of
operating
officers
and
reestablished
the
position
of
“executive
vice
president,”
defining
it
as
an
operating
officer
who
is
focused
on
the
business
from
a
management
perspective.
Based
on
its
basic
policy
of
appointing
the
right
people
to
the
right
positions,
Toyota
has
been
swiftly
and
continuously
innovating.
Toyota
will
further
press
forward
the
tide
of
such
innovations,
aiming for a corporate
structure capable of carrying
out management from
a viewpoint that is optimal for
a global
company.
In
order
to
convey
top
management’s
aspirations
and
the
company’s
direction
to
all
stakeholders,
Toyota
communicates what Toyota is really
like through “Toyota Times.”
Toyota
believes
that
it
is
critical
to
appoint
individuals
who
are
capable
of
contributing
to
decision-making
aimed
at
sustainable
growth
into
the
future
in
keeping
with
the
spirit
of
the
Toyoda
Precepts,
which
set
forth
its
founding
philosophy.
Moreover,
these
individuals
should
be
able
to
play
a
significant
role
in
transforming
Toyota
into
a
“mobility
company”
through
responding
to
social
transformation
by
using
CASE
external
partnerships
based
on
trust
and
friendship
and
internal
two-way
interactive
teamwork,
while
working
in
furtherance
of
the
SDGs,
and
towards
solutions
for
other
social
challenges.
Toyota
maintains
its
board
of
directors
and
senior
management
at
an
adequate
size,
and
ensures
they
are
overall
balanced
and
diverse,
77
including
from
the
perspective
of
gender
and
nationality.
Three
outside
members
of
the
board
of
directors
have
been
appointed
in
order
to
further
reflect
the
opinions
of
those
from
outside
the
company
in
management’s
decision-making
process.
Toyota
has
six
audit
&
supervisory
board
members,
three
of
whom
are
outside
audit
&
supervisory
board
members.
In
order
to be
prepared
in
the
event
Toyota
lacks
the
number
of
audit
&
supervisory
board
members
required
by
law,
one
substitute
audit
&
supervisory
board
member
has
been
appointed
pursuant
to Article 329, Paragraph 3 of the Companies
Act.
Set
forth
below
are
brief
summaries
of
Toyota’s
members
of
the
board
of
directors
and
audit
&
supervisory
board members.
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
Takeshi Uchiyamada
(August 17, 1946)
Chairman of the
Board of Directors
1969 Joined Toyota Motor Corporation (“TMC”)
1998 Member of the Board of Directors of
TMC
2001 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2012 Vice Chairman of TMC
2013 Chairman of TMC (to present)
(important concurrent duties)
Director of JTEKT Corporation
Director of Mitsui & Co., Ltd.
450,195
shares
Shigeru Hayakawa
(September 15, 1953)
Vice Chairman of the
Board of Directors
1977 Joined Toyota Motor Sales Co., Ltd.
2007 Managing Officer of TMC
2007 Toyota Motor North America, Inc. President
2009 Retired from Toyota Motor North America,
Inc. President
2012 Senior Managing Officer of TMC
2015 Member of the Board of Directors and
Senior Managing Officer of TMC
2017 Vice Chairman of TMC (to present)
(important concurrent duties)
Representative Director of Institute
for
International Economic Studies
242,040
shares
Akio Toyoda
(May 3, 1956)
President,
Member of the Board
of Directors
1984 Joined TMC
2000 Member of the Board of Directors of
TMC
2002 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2009 President of TMC (to present)
(important concurrent duties)
Chairman and CEO of Toyota Motor North
America, Inc.
Chairman of TOYOTA FUDOSAN CO., LTD.
Chairman of the Japan Automobile Manufacturers
Association, Inc.
Director of DENSO Corporation
Representative Director of ROOKIE Racing, Inc.
24,077,945
shares
78
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
James Kuffner
(January 18, 1971)
Member of the Board
of Directors,
Operating Officer
1999 Postdoctoral Research Fellow at the Japan
Society for the Promotion of Science
2002 Research Scientist of the Robotics Institute
at Carnegie Mellon University
2005 Assistant Professor of the Robotics
Institute
at Carnegie Mellon University
2008 Associate Professor of the Robotics Institute
at Carnegie Mellon University
2009 Research Scientist at Google Inc.
2013 Engineering Director of Google Inc.
2016 Chief Technology Officer of Toyota
Research Institute, Inc.
2018 Chief Executive Officer of Toyota Research
Institute - Advanced Development, Inc.
2018 Executive Advisor at Toyota Research
Institute, Inc.
2020 Senior Fellow at TMC
2020 Member of the Board of Directors,
Operating Officer of TMC (to present)
2021 Toyota Research Institute - Advanced
Development, Inc. changed its corporate
name
to Woven Core, Inc. and was reorganized into
the Woven Planet Group.
2021 Chief Executive Officer and Representative
Director of Woven Planet Holdings, Inc. (to
present)
(important concurrent duties)
Chief Executive Officer and Representative
Director of Woven Planet Holdings, Inc.
Representative Director of Woven Core,
Inc.
President and Representative Director
of Woven
Alpha, Inc.
Director of Joby Aviation, Inc.
2,970
shares
Kenta Kon
(August 2, 1968)
Member of the Board
of Directors,
Operating Officer,
Executive Vice
President
1991 Joined TMC
2018 Managing Officer of TMC
2019 Operating Officer of TMC
2021 Member of the Board of Directors,
Operating Officer of TMC
2022 Member of the Board of Directors,
Operating Officer, Executive Vice President
of
TMC (to present)
34,944
shares
79
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
Masahiko Maeda
(February 10, 1969)
Member of the Board
of Directors,
Operating Officer,
Executive Vice
President
1994 Joined TMC
2018 Managing Officer of TMC
2019 Operating Officer of TMC
2019 Chairman and President of Toyota Daihatsu
Engineering & Manufacturing Co., Ltd.
2022 Operating Officer, Executive Vice President
of TMC
2022 Member of the Board of Directors,
Operating Officer, Executive Vice President
of
TMC (to present)
(important concurrent duties)
Representative Director of Woven Planet
Holdings, Inc.
Director of Toyota Industries Corporation
21,984
shares
Ikuro Sugawara
(March 6, 1957)
Outside Member of
the Board of
Directors
1981 Joined Ministry of International
Trade and
Industry
2010 Director-General of the Industrial
Science
and Technology Policy and Environment
Bureau, Ministry of Economy, Trade and
Industry
2012 Director-General of the Manufacturing
Industries Bureau, Ministry of
Economy, Trade
and Industry
2013 Director-General of the Economic
and
Industrial Policy Bureau, Ministry
of Economy,
Trade and Industry
2015 Vice-Minister of Ministry
of Economy,
Trade and Industry
2017 Retired from the Ministry
of Economy,
Trade and Industry
2017 Special Advisor to the Cabinet 2018 Retired
from Special Advisor to the Cabinet
2018 Outside Member of the Board of Directors
of TMC (to present)
(important concurrent duties)
Independent Director of Hitachi, Ltd.
Sir Philip Craven
(July 4, 1950)
Outside Member of
the Board of
Directors
1989 President of the International
Wheelchair
Basketball Federation
2001 President of the International
Paralympic
Committee
2002 Retired as President of the International
Wheelchair Basketball Federation
2017 Retired as President of the International
Paralympic Committee
2018 Outside Member of the Board of Directors
of TMC (to present)
80
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
Teiko Kudo
(May 22, 1964)
Outside Member of
the Board of
Directors
1987 Joined the Sumitomo Bank, Limited
2014 Executive Officer of Sumitomo Mitsui
Banking Corporation
2017 Managing Executive Officer of Sumitomo
Mitsui Banking Corporation
2018 Outside Member of the Board of Directors
of TMC (to present)
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Banking Corporation
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Financial Group, Inc.
2021 Director and Senior Managing Executive
Officer of Sumitomo Mitsui
Banking
Corporation (to present)
2021 Senior Managing Corporate Executive
Officer of Sumitomo Mitsui
Financial Group,
Inc.
2021 Director Senior Managing Executive Officer
of Sumitomo Mitsui Financial
Group, Inc. (to
present)
(important concurrent duties)
Director Senior Managing Executive Officer
of
Sumitomo Mitsui Financial Group, Inc.
Director and Senior Managing Executive Officer
of Sumitomo Mitsui Banking Corporation
9,467
shares
Haruhiko Kato
(July 21, 1952)
Full-time Audit &
Supervisory Board
Member
1975 Joined Ministry of Finance
2007 Director-General of the Tax Bureau,
Ministry of Finance
2009 Commissioner of National Tax Agency
2010 Retired from Commissioner of
National Tax
Agency
2011 Senior Managing Director of Japan
Securities Depository Center, Inc.
2011 President of Japan Securities Depository
Center, Inc.
2013 Member of the Board of Directors of
TMC
(to present)
2015 President and CEO of Japan Securities
Depository Center, Inc.
2018 Retired as Member of the Board of Directors
of TMC
2019 Retired as President and CEO of Japan
Securities Depository Center, Inc.
2019 Audit & Supervisory Board Member of
TMC (to present)
2019 Retired as Director of Japan Securities
Depository Center, Inc.
8,808
shares
81
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
Masahide Yasuda
(April 1, 1949)
Full-time Audit &
Supervisory Board
Member
1972 Joined TMC
2000 General Manager of Overseas Parts Division
of TMC
2007 President of Toyota Motor Corporation
Australia Ltd.
2014 Chairman of Toyota Motor Corporation
Australia Ltd.
2017 Retired as Chairman of Toyota Motor
Corporation Australia Ltd.
2018 Audit & Supervisory Board Member of
TMC (to present)
47,703
shares
Katsuyuki Ogura
(January 25, 1963)
Full-time Audit &
Supervisory Board
Member
1985 Joined TMC
2015 General Manager of Affiliated
Companies
Finance Dept. of TMC
2018 General Manager of Audit & Supervisory
Board Office of TMC
2019 Audit & Supervisory Board Member of
TMC (to present)
(important concurrent duties)
Outside Audit & Supervisory Board Member of
Aichi Steel Corporation
27,146
shares
Yoko Wake
(November 18, 1947)
Outside Audit &
Supervisory Board
Member
1970 Joined the Fuji Bank, Limited
1973 Retired from the same
1977 Assistant Lecturer of Faculty of
Business
and Commerce of Keio University
1982 Associate Professor of the same
1993 Professor of the same
2011 Outside Audit & Supervisory Board Member
of TMC (to present)
2013 Professor Emeritus of Keio University
(to
present)
(important concurrent duties)
Professor Emeritus of Keio University
Hiroshi Ozu
(July 21, 1949)
Outside Audit &
Supervisory Board
Member
2012 Prosecutor-General
2014 Retired from Prosecutor-General
2014 Registered as Attorney
2015 Outside Audit & Supervisory Board Member
of TMC (to present)
(important concurrent duties)
Attorney
Outside Corporate Auditor of Mitsui &
Co., Ltd.
Audit & Supervisory Board Member (External)
of
Shiseido Company, Limited
1,615
shares
82
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
George
Olcott
(May
7,
1955)
Outside
Audit
&
Supervisory
Board
Member
1986
Joined
S.G.Warburg
&
Co.,Ltd
1999
President
of
UBS
Asset
Management
(Japan)
1999
President,
Japan
UBS
Brinson
2000
Managing
Director,
Equity
Capital
Markets,
UBS
Warburg
Tokyo
2001
Judge
Business
School,
University
of
Cambridge
2005
FME
Teaching
Fellow,
Judge
Business
School,
University
of
Cambridge
2008
Senior
Fellow,
Judge
Business
School,
University
of
Cambridge
(important
concurrent
duties)
Outside
Director
of
Kirin
Holdings
Company,
Limited
1.
Mr.
Akio
Toyoda,
who
is
President
and
Member
of
the
Board
of
Directors,
concurrently
serves
as
Operating
Officer
(President).
2.
Dr.
James
Kuffner,
who
is
a
Member
of
the
Board
of
Directors,
concurrently
serves
as
Operating
Officer.
3.
Mr.
Kenta
Kon
and
Mr.
Masahiko
Maeda,
who
are
Members
of
the
Board
of
Directors,
concurrently
serve
as
Operating
Officer
(Executive
Vice
President).
None
of
the
persons
listed
above
was
selected
as
a
member
of
board
of
directors,
audit
&
supervisory
board
member
or
member
of
senior
management
pursuant
to
an
arrangement
or
understanding
with
Toyota’s
major
shareholders,
customers,
suppliers
or
others.
Set
forth
below
is
a
brief
summary
of
Toyota’s
substitute
audit
&
supervisory
board
member.
Name
(Date
of
Birth)
Position
Brief
Career
Summary
and
Important
Concurrent
Duties
Number
of
Common
Shares
Ryuji
Sakai
(August
7,
1957)
Substitute
Audit
&
Supervisory
Board
Member
1985
Registered
as
attorney
and
joined
Nagashima
&
Ohno
1990
Wilson
Sonsini
Goodrich
&
Rosati
1995
Partner
of
Nagashima
&
Ohno
2000
Partner
of
Nagashima
Ohno
&
Tsunematsu
(to
present)
(important
concurrent
duties)
Attorney
Outside
Audit
&
Supervisory
Board
Member
of
Kobayashi
Pharmaceutical
Co.,
Ltd.
6.B
COMPENSATION
Decision
Making
Policy
and
Process
Toyota
believes
that
it
is
critical
to
appoint
individuals
who
are
capable
of
contributing
to
decision-making
aimed
at
sustainable
growth
into
the
future
in
keeping
with
the
spirit
of
the
Toyoda
Precepts,
which
set
forth
its
founding
philosophy.
Moreover,
these
individuals
should
be
able
to
play
a
significant
role
in
transforming
83
Toyota
into
a
“mobility
company”
and
contribute
to
the
solutions
of
social
issues,
including
by
contributing
to
the
realization
of
the
SDGs,
through
responding
to
social
transformation
by
using
CASE
external
partnerships
based on
trust
and
friendship
and
internal
two-way
interactive
teamwork.
Toyota’s director
compensation
system
is
an
important
means
through
which
to
promote
various
initiatives
and
is
determined
based
on
the
following
policy.
It
should
be
a
system
that
encourages
members
of
the
board
of
directors
to
work
to
improve
the
medium- to long-term corporate
value of Toyota.
It
should
be
a
system
that
can
maintain
compensation
levels
that
will
allow
Toyota
to secure
and
retain
talented personnel.
It
should
be
a
system
that
motivates
members
of
the
board
of
directors
to
promote
management
from
the same viewpoint as our shareholders
with a stronger sense of responsibility
as corporate managers
.
The board of directors
decides by
resolution the policy
for determining
remuneration for and other
payments
to
each
member
of
the
board
of
directors.
Remuneration
is
effectively
linked
to
corporate
performance
while
reflecting
individual
job
responsibilities
and
performance.
Remuneration
standards
in
each
member’s
home
country
are
also
taken
into
account
when
determining
remuneration
levels
and
payment
methods.
Remuneration
for
outside
members
of
the
board
of
directors
and
audit
&
supervisory
board
members
consists
only
of
fixed
payments.
As
a
result,
this
remuneration
is
not
readily
impacted
by
business
performance,
helping
to
ensure
independence from management.
Based
on
the
resolution
of
the
115th
Ordinary
General
Shareholders’
Meeting
held
on
June
13,
2019
concerning
remuneration
for
the
members
of
the
board
of
directors
of
Toyota,
the
maximum
cash
compensation
was
set
at
3.0
billion
yen
per
year
(of
which,
the
maximum
amount
payable
to
outside
members
of
the
board
of
directors
is
0.3
billion
yen
per
year),
and
the
maximum
share
compensation
was
set
at
4.0
billion
yen
per
year.
The
number
of
members
of
the
board
of
directors
as
of
the
conclusion
of
the
115th
Ordinary
General
Shareholders’ Meeting was nine (including
three outside members
of the board of directors).
The
amount
of
remuneration
for
audit
&
supervisory
board
members
of
Toyota
was
set
at
30
million
yen
or
less
per
month
at
the
104th
Ordinary
General
Shareholders’
Meeting
held
on
June
24,
2008.
The
number
of
audit
&
supervisory
board
members
as
of
the
conclusion
of
the
104th
Ordinary
General
Shareholders’
Meeting
was seven.
The
amount
of
remuneration
for
each
member
of
the
board
of
directors
of
Toyota
and
the
remuneration
system
are
decided
by
the
board
of
directors
and
the
“Executive
Compensation
Meeting,”
a
majority
of
the
members of which
are outside members
of the
board of directors,
to ensure the
independence of the
decision. The
Executive
Compensation
Meeting
consists
of
chairman
of
the
board
of
directors
Takeshi
Uchiyamada
(Chairman),
member
of
the
board
of
directors
Kenta
Kon
(who
replaced
Koji
Kobayashi
on
June
15,
2022),
and
outside members of the board of
directors Ikuro Sugawara, Sir Philip Craven
and Teiko Kudo.
The
board
of
directors
resolves
the
policy
for
determining
remuneration
for
and
other
payments
to
each
member
of
the
board
of
directors
and
the
executive
remuneration
system
as
well
as
the
total
amount
of
remuneration
for
a
given
fiscal
year.
The
board
of
directors
also
resolves
to
delegate
the
determination
of
the
amount of remuneration for each
member of the board of directors
to the Executive Compensation Meeting.
The
Executive
Compensation
Meeting
reviews
the
remuneration
system
for
members
of
board
of
directors
and
senior
management
on
which
it
will
consult
with
the
board
of
directors
and
determines
the
amount
of
remuneration
for
each
member
of
the
board
of
directors,
taking
into
account
factors
such
as
corporate
performance
as
well
as
individual
job
responsibilities
and
performance,
in
accordance
with
the
policy
for
determining
remuneration
for
and
other
payments
to
each
member
of
the
board
of
directors
established
by
the
board
of
directors.
The
board
of
directors
considers
that
such
decisions
made
by
the
Executive
Compensation
Meeting
are
in
line
with
the
policy
on
determining
remuneration
and
other
payments
for
each
member
of
the
board of directors.
84
Remuneration
for
audit
&
supervisory
board
members
is
determined
by
the
audit
&
supervisory
board
within the scope determined by resolution
of the shareholders’ meeting.
Executive
Compensation
Meetings
were
held
in
May
2021
and
March
and
April
2022
to
discuss
and
determine the amount of remuneration
for fiscal 2021 and other
relevant matters.
Furthermore,
preliminary
examination
meetings,
consisting
only
of
outside
members
of
the
board
of
directors,
were
held
on
a
total
of
five
occasions
in
July,
September
and
October
2021
and
February
and
March
2022
to
discuss
matters
for
the
Executive
Compensation
Meetings.
Remuneration
for
the
members
of
the
board
of directors were determined
with the unanimous consent of the Executive
Compensation Meeting.
The principal topics discussed at
Executive Compensation Meetings included:
Remuneration
level for each position and job
responsibility
Evaluation
of benchmarks and actual results
of fiscal 2021
Evaluation
of individual performance
Determination
of the amount of remuneration
for each member of the
board of directors
Method
of
Determining
Performance-based
Remuneration
(Bonus
and
Share
Compensation)
Directors
with
Japanese
Citizenship
(Excluding
Outside
Members
of
the
Board
of
Directors
)
Toyota
sets
the
total
amount
of
remuneration
(“Annual
Total
Remuneration”)
received
by
each
member
of
the
board
of
directors
in
a
year
based
on
consolidated
operating
income,
the
fluctuation
of
the
market
capitalization
of
Toyota
(calculated
by
multiplying
the
closing
price
of
Toyota’s
common
stock
on
the
Tokyo
Stock
Exchange
and
the
total
number
of
issued
shares
of
Toyota
common
stock
(less
shares
of
treasury
stock))
and
individual
performance
evaluation.
The
balance
after
deducting
fixed
remuneration,
or
monthly
remuneration, from Annual Total Remuneration
constitutes performance-based
remuneration.
Toyota
determines
the
annual
total
remuneration
level
appropriate
for
each
position
and
job
responsibility
by referring to the benchmarking
result of remuneration for
officers of companies located
in Japan.
Concept
of
Each
Item
Consolidated
operating
income
Indicator for evaluating Toyota’s
efforts based on business
performance
Fluctuation
of
the
market
capitalization
Corporate value indicator for shareholders
and investors to evaluate
Toyota’s efforts
Individual
performance
evaluation
Qualitative evaluation of performance
of each member of the
board
of directors
85
Method
and
Reference
Value
for
Evaluating
Indicators
and
Evaluation
Result
for
Fiscal
2022
Evaluation
Weight
Evaluation
Method
Reference
Value
Evaluation
Result
for
Fiscal
2022
Consolidated
operating
income
70%
Evaluate the degree of attainment
of consolidated operating income
in fiscal 2021, using required
income (set in 2011) for Toyota’s
sustainable growth as reference
value
¥1 trillion
210%
Fluctuation
of
Toyota’s
market
capitalization
30%
Comparatively evaluate the
fluctuation of Toyota’s market
capitalization up to fiscal
2022
(average of January-March),
using the market capitalization
of
Toyota and the TOPIX of fiscal
2021 (average of January-March)
as reference values
Toyota:
¥22.3 trillion
TOPIX:
¥1,903.60
Method
of
Setting
Annual
Total
Remuneration
Annual
Total
Remuneration
is
set
using
a
theoretical
formula
that
takes
into
account
the
benchmarking
results
of
remuneration
for
members
of
the
board
of
directors.
Annual
Total
Remuneration
is
set
based
on
consolidated operating
income and the
fluctuation of
the market capitalization
of
Toyota, and then adjusted
based
on
individual
performance
evaluation.
Starting
fiscal
2022,
Toyota
introduced
the
individual
performance
evaluation
for
the
chairman,
vice
chairman
and
president.
Individual
performance
evaluation
takes
into
account
various
factors
such
as
initiatives
in
keeping
with
the
spirit
of
the
Toyoda
Precepts
which
set
forth
Toyota’s
founding
philosophy,
trust
from
his
or
her
peers
and
contribution
to
the
promotion
of
human
resources
development. The Individual
performance evaluation
is set
within the range
of 50% above
or below Annual Total
Remuneration
in
accordance
with
the
position
and
job
responsibilities,
and
the
amount
of
the
annual
total
remuneration for each member
of the board of directors is
calculated based on such evaluation
results.
Directors
with
Foreign
Citizenship
(Excluding
Outside
Members
of
the
Board
of
Directors
)
Fixed
remuneration
and
performance-based
remuneration
are
set
based
on
the
remuneration
levels
and
structures
that
allow
Toyota
to
secure
and
retain
talented
personnel.
Fixed
remuneration
is
set,
taking
into
account
each
member’s
job
responsibilities
and
the
remuneration
standards
of
such
member’s
home
country.
Performance-based
remuneration
is
set
based
on
consolidated
operating
income,
the
fluctuation
of
the
market
capitalization
of
Toyota
and
individual
performance,
taking
into
account
each
member’s
job
responsibilities
and
the
remuneration
standards
of
such
member’s
home
country.
The
concept
of
each
item
is
the
same
as
that
for
directors
with
Japanese
citizenship
(excluding
outside
members
of
the
board
of
directors).
There
are
cases
where
Toyota provides
income
tax
compensation
for certain
members
of the
board
of
directors
in
light
of the
difference
in income tax rates with those of
his or her home country.
Compensation
[The
aggregate
amount
of
remuneration,
including
bonuses,
accrued
for
all
members
of
the
board
of
directors
and
audit
&
supervisory
board
members
as
a
group
by
Toyota
for
services
in
all
capacities
was
¥2,705 million during fiscal 2022.
86
Toyota
Motor
Corporation
and
its
subsidiaries
have
not
set
aside
or
accrued
any
amounts
to
provide
pension,
retirement
or
similar
benefits
to
members
of
the
board
of
directors
and
audit
&
supervisory
board
members of Toyota Motor Corporation.
Toyota’s
Annual
Securities
Report
filed
with
the
Kanto
Local
Bureau
of
Finance
on
June
23,
2022,
contained the following
information concerning
compensation in fiscal
2022 on a consolidated basis for members
of
the
board
of
directors
and
audit
&
supervisory
board
members
whose
total
compensation
exceeded
¥100 million during such period:
Name,
Position
Classification
of
Company
Compensation
per
Type
(million
yen)
Total
Compensation
(millions
of
yen)
Fixed
Compensation
Performance-based
Compensation
Retirement
Benefits
Monthly
Compensation
Bonus
Share
Compensation
Takeshi Uchiyamada, Member
of the Board of Directors
....
Toyota Motor Corporation
118
79
76
(37,000 shares)
273
Shigeru Hayakawa, Member of
the Board of Directors
......
Toyota Motor Corporation
74
1
81
(39,000 shares)
156
Akio Toyoda, Member of the
Board of Directors
.........
Toyota Motor Corporation
204
0
481
(230,000 shares)
685
Koji Kobayashi, Member of the
Board of Directors
.........
Toyota Motor Corporation
78
0
100
(48,000 shares)
178
James Kuffner, Member of the
Board of Directors
.........
Toyota Motor Corporation
152
100
906
Consolidated subsidiary
(Woven Planet Holdings,
Inc.*)
642
13
*
Fixed
compensation
that
Woven
Planet
Holdings,
Inc.,
Toyota’s
consolidated
subsidiary,
pays
to
James
Kuffner includes fixed compensation
that is paid trimonthly and
annually.
The amounts above were recorded as expenses in
fiscal 2022.
6.C
BOARD
PRACTICES
Toyota’s
articles
of
incorporation
provide
for
a
board
of
directors
of
not
more
than
20
members
and
for
not
more
than
seven
audit
&
supervisory
board
members.
Shareholders
elect
the
members
of
the
board
of
directors
and
audit
&
supervisory
board
members
at
the
general
shareholders’
meeting.
The
normal
term
of
office
of
a
member
of
the
board
of
directors
is
one
year
and
that
of
an
audit
&
supervisory
board
member
is
four
years.
Members of
the board
of directors
and audit &
supervisory board
members may serve
any number
of consecutive
terms.
The
board
of
directors
may
appoint
one
Chairman
of
the
Board
of
Directors
and
one
President,
as
well
as
one
or
more
Vice
Chairmen
of
the
Board
and
Executive
Vice
Presidents.
The
board
of
directors
elects,
pursuant
to
its
resolutions,
one
or
more
Representative
Directors.
Each
Representative
Director
represents
Toyota
generally in
the conduct
of its
affairs.
The board
of directors
has the
ultimate
responsibility
for the
administration
of Toyota’s affairs.
None of Toyota’s
members of the
board of directors
is party
to a service
contract with Toyota
or any of its subsidiaries that
provides for benefits upon termination
of employment.
Under
the
provisions
of
the
Companies
Act,
if
Toyota
decides
the
terms
of
an
agreement
promising
that
Toyota
will
compensate
a
member
of
the
board
of
directors
for
all
or
part
of
certain
expenses
incurred
by
the
member
of
the
board
of
directors,
such
a
decision
must
be
made
by
a
resolution
of
the
board
of
directors.
Under
87
the
provisions
of
the
Companies
Act,
if
Toyota
decides
the
terms
of
an
insurance
agreement
to
be
executed
with
an
insurer,
under
which
a
member
of
the
board
of
directors
is
the
insured,
and
which
promises
that
the
insurer
will compensate
for damage
arising
from the
member
of
the
board
of
directors
being
held
liable
in
relation
to
the
execution
of
his
or
her
duties
or
from
a
liability
claim
filed
against
the
member
of
the
board
of
directors
,
such
decision must be made by a resolution
of the board of directors.
Under the Companies
Act and
Toyota’s
articles of
incorporation, Toyota
may, by a resolution
of its
board of
directors,
exempt
members
of
the
board
of
directors
(including
former
members
of
the
board
of
directors)
from
their
liabilities
to
Toyota
arising
in
connection
with
their
failure
to
execute
their
duties
within
the
limits
stipulated
by
laws
and
regulations.
In
addition,
Toyota
may
enter
into
a
liability
limitation
agreement
with
each
member
of
the
board
of
directors
(excluding
executive
members
of
the
board
of
directors,
among
others)
which
limits
the
maximum
amount
of
their
liabilities
owed
to
Toyota
arising
in
connection
with
their
failure
to
execute
their duties to an amount equal
to the minimum liability
limit amount prescribed
in the laws and regulations.
Under the Companies
Act, Toyota
must
have at least
three audit &
supervisory board
members. At least
half
of
the
audit
&
supervisory
board
members
are
required
to
be
an
“outside”
audit
&
supervisory
board
member,
which is any person who satisfies all of
the following requirements:
(a)
the
person
has
never
been
a
member
of
the
board
of
directors,
accounting
counselor
(in
the
case
that
an
accounting
counselor
is
a
legal
entity,
an
employee
of
such
entity
who
is
in
charge
of
its
affairs),
executive
officer,
manager
or
employee
of
Toyota
or
its
subsidiaries
during
the
ten
year
period
before
becoming
an
outside
audit & supervisory board member;
(b)
if
the
person
was
an
audit
&
supervisory
board
member
of
Toyota
or
any
of
its
subsidiaries
at
any
time
during
the
ten
year
period
before
becoming
an
outside
audit
&
supervisory
board
member,
such
person
has
not
been a member
of
the board
of directors,
accounting counselor
(in the
case that an
accounting counselor
is a legal
entity,
an
employee
of
such
entity
who
is
in
charge
of
its
affairs),
executive
officer,
manager
or
employee
of
Toyota
or
any
of
its
subsidiaries
during
the
ten
year
period
before
becoming
an
audit
&
supervisory
board
member of Toyota or any of its subsidiaries;
and
(c)
the
person
is
not
a
spouse
or
relative
within
the
second
degree
of
kinship
of
any
member
of
the
board
of
directors or manager or other
key employee of Toyota.
The audit
&
supervisory
board members
may
not
at the
same
time
be a
member
of the
board of
directors,
an
accounting
counselor
(in
case
that
an
accounting
counselor
is
a
judicial
person,
a
member
of
such
judicial
person
who
is
in
charge
of
its
affairs),
executive
officers,
general
managers
or
employees
of
Toyota
or
any
of
its
subsidiaries.
Together,
these
audit
&
supervisory
board
members
form
the
audit
&
supervisory
board.
The
audit & supervisory
board members
have the duty to
examine the
financial statements
and business
reports which
are
submitted
by
the
board
of
directors
to
the
general
shareholders’
meeting.
The
audit
&
supervisory
board
members
also
monitor
the
administration
of
Toyota’s
affairs
by
the
members
of
the
board
of
directors.
Audit
&
supervisory
board
members
are
not
required
to
be,
and
Toyota’s
audit
&
supervisory
board
members
are
not,
certified
public
accountants.
They
are
required
to
participate
in
meetings
of
the
board
of
directors
but
are
not
entitled to vote.
Under the Companies
Act and
Toyota’s
articles of
incorporation, Toyota
may, by a resolution
of its
board of
directors,
exempt
audit
&
supervisory
board
members
(including
former
audit
&
supervisory
board
members)
from
their
liabilities
to
Toyota
arising
in
connection
with
their
failure
to
execute
their
duties
within
the
limits
stipulated
by
laws
and
regulations.
In
addition,
Toyota
may
enter
into
a
liability
limitation
agreement
with
each
audit
&
supervisory
board
member
which
limits
the
maximum
amount
of
their
liabilities
owed
to
Toyota
arising
in
connection
with
their
failure
to
execute
their
duties
to
an
amount
equal
to
the
minimum
liability
limit
amount
prescribed in the laws and regulations.
88
Toyota
does
not
have
a
remuneration
committee.
However,
members
of
Toyota’s
Executive
Compensation
Meeting discuss remuneration
for members of the board of directors.
The
Executive
Compensation
Meeting
reviews
the
remuneration
system
for
members
of
the
board
of
directors
and
senior
management
and
determines
the
amount
of
remuneration
for
each
member
of
the
board
of
directors,
taking
into
account
factors
such
as
corporate
performance
as
well as
individual
job
responsibilities
and
performance. The
members
of the
meeting are
Takeshi Uchiyamada,
the Chairman
of the Board of
Directors, and
Kenta Kon, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member
of the Board of Directors.
6.D
EMPLOYEES
The total
number of
Toyota employees,
on a
consolidated basis,
was 372,817
as of March
31, 2022, 366,283
as
of
March
31,
2021
and
361,907
as
of
March
31,
2020.
The
following
tables
set
forth
a
breakdown
of
persons
employed by business segment and by geographic
location as of March 31, 2022.
Segment
Number
of
Employees
Location
Number
of
Employees
Automotive
..........................
330,184
Japan
.............................
203,948
Financial services
.....................
13,140
North America
......................
55,471
All other
.............................
24,258
Europe
............................
24,852
Unallocated
..........................
5,235
Asia
..............................
66,328
Other*
............................
22,218
Total
...............................
372,817
Total
.............................
372,817
*
“Other”
consists
of
Central
and
South
America,
Oceania, Africa and the Middle East.
Most
regular
employees
of
Toyota
Motor
Corporation
and
its
consolidated
subsidiaries
in
Japan,
other
than
management,
are
required
to
become
members
of
the
labor
unions
that
compose
the
Federation
of
All
Toyota
Workers’
Unions.
Approximately
86%
of
Toyota
Motor
Corporation’s
regular
employees
in
Japan
are
members
of this union.
In
Japan,
basic
wages
and
other
working
conditions
are
negotiated
annually.
In
addition,
in
accordance
with
Japanese
national
custom,
each
employee
is
also
paid a
semi-annual
bonus. Bonuses
are
negotiated
at
the
time
of
wage
negotiations
and
are
based
on
Toyota’s
financial
results,
prospects
and
other
factors.
The
average
wage
increase for all union members,
excluding bonuses, in Japan was approximately
2.62% in fiscal 2022.
In
general,
Toyota
considers
its
labor
relations
with
all
of
its
workers
to
be
good.
However,
Toyota
is
currently
a
party
to,
and
otherwise
from
time
to
time
experiences,
labor
disputes
in
some
of
the
countries
in
which
it
operates.
Toyota
does
not
expect
any
disputes
to
which
it
is
currently
a
party
to
materially
affect
Toyota’s consolidated financial
position.
Toyota’s average number of temporary
employees on a consolidated basis
was 87,120 during fiscal 2022.
6.E
SHARE
OWNERSHIP
For
information
on
the
number
of
shares
of
Toyota’s
common
stock
held
by
each
member
of
the
board
of
directors and audit & supervisory
board member as of June 2022, see “— Directors
and Senior Management.”
None
of
Toyota’s
shares
of
common
stock
entitles
the
holder
to
any
preferential
voting
rights.
As
of
March
31,
2022,
Toyota
does
not
have
any
stock
option
plan
for
which
stock
options
or
stock
acquisition
rights
are exercisable or will become
exercisable in the future.
89
Toyota’s
board
of
directors
resolves
the
share
compensation
within
the
maximum
share
compensation
amount of
4.0 billion
yen per
year (also,
the total
number
of Toyota’s
shares of
common stock
to be allotted
shall
not
exceed
a
maximum
of
4
million
shares
per
year
in
total
for
eligible
members
of
the
board
of
directors
(excluding
outside
members
of
the
board
of
directors))
established
at
the
115th
Ordinary
General
Shareholders’
Meeting
held
on
June
13,
2019
and
the
118th
Ordinary
General
Shareholders’
Meeting
held
on
June
15,
2022.
The overview of the share compensation is
as follows.
Eligible
persons
Members of the board of directors
of Toyota (excluding outside members
of
the board of directors)
Total
amount
of
the
share
compensation
Maximum of 4.0 billion yen per year
Amount
of
the
share
compensation
payable
to
each
member
of
the
board
of
directors
Set each year considering factors
such as corporate results, duties,
and
performance
Type
of
shares
to
be
allotted
and
method
of
allotment
Issue or disposal of common stock (with
transfer restrictions
under an
allotment agreement)
Total
number
of
shares
to
be
allotted
Maximum of 4,000,000 shares per year in
total to eligible members
of the
board of directors
(Provided, however, that if a stock split,
including a gratis allotment,
or a
reverse stock split of Toyota’s
common stock is carried out after
June 15,
2022, or in case of events that otherwise
require an adjustment to the
total
number of Toyota’s shares of common stock
to be issued or disposed of as
restricted share compensation,
such total number of shares
will be adjusted
to a reasonable extent.)
Amount
to
be
paid
Determined by the board of directors
of Toyota based on the closing price
of Toyota’s common stock on the Tokyo Stock Exchange on the
business
day prior to each resolution of the
board of directors, within a range
that is
not particularly advantageous to
eligible members of the board
of directors
Transfer
restriction
period
A period of three to fifty years
from the allotment date,
which is determined
by the board of directors of Toyota in advance
Conditions
for
removal
of
transfer
restrictions
Restrictions will be removed upon the
expiration of the transfer
restriction
period.
However, restrictions will also be
removed in the case of expiration
of the
term of office, death, or other
legitimate reasons.
Gratis
acquisition
by
Toyota
Toyota will be able to acquire all allotted
shares without consideration
in
the case of violations of laws and regulations
or other reasons specified
by
the board of directors of Toyota during
the transfer restriction
period.
Members
of
the
board
of
directors
of
Toyota
with
foreign
citizenship
are
not
eligible
for
the
share
compensation.
Toyota also has an
employee stock ownership
association in
Japan for employees
and full time and part
time
company
advisors.
Members
of
the
employee
stock
ownership
association
set
aside
certain
amounts
from
their
monthly
salary
and
bonuses
to
purchase
Toyota’s
common
stock
through
the
employee
stock
ownership
association. As
of March
31, 2022, the
employee stock
ownership association
held 74,096,504 shares of
Toyota’s
common stock.
90
ITEM
7.
MAJOR
SHAREHOLDERS
AND
RELATED
PARTY
TRANSACTIONS
7.A
MAJOR
SHAREHOLDERS
As
of
March
31,
2022,
16,314,987,460
shares
of
Toyota’s
common
stock
(of
which
2,536,685,916
shares
were
treasury
stock
and
13,778,301,544
shares
were
outstanding)
were
issued.
Toyota
resolved
at
its
board
of
directors
meeting
held
on
December
14,
2020
to
exercise
Toyota’s
cash
call
option
to
acquire
all
outstanding
Model
AA
Class
Shares
and,
subject
to
such
acquisition,
to
cancel
all
Model
AA
Class
Shares
pursuant
to
the
Companies
Act.
Toyota
completed
the
acquisition
of
all
outstanding
Model
AA
Class
Shares
on
April
2,
2021
and
cancelled
them
on
April
3,
2021.
Information
concerning
beneficial
ownership
of
Toyota’s
common
stock
in
the
table
below
was
prepared
from
information
known
to
Toyota
or
that
could be
ascertained
from public
filings,
including
filings
made
by
Toyota’s
shareholders
regarding
their
ownership
of
Toyota’s
common
stock
under
the
Financial Instruments and Exchange Law of Japan.
Under
the
Financial
Instruments
and
Exchange
Law,
any
person
who
becomes,
beneficially
and
solely
or
jointly,
a
holder,
including,
but
not
limited
to,
a
deemed
holder
who
manages
shares
for
another
holder
pursuant
to
a
discretionary
investment
agreement,
of
more
than
5%
of
the
total
issued
shares
of
a
company
listed
on
a
Japanese
stock
exchange
(including
American
Depositary
Shares,
or
ADSs,
representing
such
shares)
must
file
a
report concerning the
shareholding with the director
of the relevant local
finance bureau. A similar report
must be
filed,
with
certain
exceptions,
if
the
percentage
of
shares
held
by
a
holder,
solely
or
jointly,
of
more
than
5%
of
the
total
issued
shares
of
a
company
increases
or
decreases
by
1%
or
more,
or
if
any
change
to
a
material
matter
set forth in any previously filed
reports occurs.
Based
on
information
known
to
Toyota
or
that
can
be
ascertained
from
public
filings,
the
following
table
sets
forth
the
beneficial
ownership
of
holders
of
5%
or
more
of
Toyota’s
common
stock
as
of
the
most
recent
practicable date.
Name
of
Beneficial
Owner
Number
of
Shares
of
Common
Stock
(in
thousands)
Percentage
of
Outstanding
Voting
Shares
of
Common
Stock
Toyota Industries Corporation
........................................
1,192,331
8.68
According
to
The
Bank
of
New
York
Mellon,
depositary
for
Toyota’s
ADSs
(the
“Depositary”),
as
of
March
31,
2022,
295,944,975
shares
of
Toyota’s
common
stock
were
held
in
the
form
of
ADSs
and
there
were
1,766
ADS
holders
of
record
and
431,983
beneficial
owners
in
the
United
States.
According
to
Toyota’s
register
of
shareholders,
as
of
March
31,
2022,
there
were
813,254
holders
of
common
stock
of
record
worldwide.
As
of
March
31,
2022,
there
were
479
record
holders
of
Toyota’s
common
stock
with
addresses
in
the
United
States,
whose
shareholdings
represented
approximately
10.2%
of
the
issued
common
stock
on
that
date.
Because
some
of
these
shares
were
held
by
brokers
or
other
nominees,
the
number
of
record
holders
with
addresses
in
the
United States might not fully show the
number of beneficial owners in the
United States.
None of Toyota’s shares of common stock entitles
the holder to any preferential
voting rights.
Toyota
cancelled
all
of
the
First
Series
Model
AA
Class
Shares
on
April
3,
2021,
and
as
such,
there
are
no
holders of First Series Model AA Class Shares.
To
the
extent
known
to
Toyota,
Toyota
is
not
owned
or
controlled,
directly
or
indirectly,
by
another
corporation, any foreign government
or any natural or legal person.
Toyota knows of no arrangements the operation
of which may at a later time
result in a change of control.
Toyota resolved
at
its
board
of
directors
meeting
held
on
May
12,
2021
to split
each share
of
common
stock
of
Toyota
as
of
September
30,
2021,
the
record
date,
into
five
shares,
effective
October
1,
2021.
Toyota
decided
91
to
do
so
in
order
to
create
an
environment
in
which
Toyota
shares
are
more
accessible
to
a
broader
base
of
investors
by
reducing
the
price
per
investment
unit.
In
conjunction
with
the
stock
split,
in
accordance
with
Article
184,
Paragraph
2
of
the
Companies
Act,
Toyota
amended
its
articles
of incorporation
to increase
the total
number
of
shares
of
common
stock
which
Toyota
is
authorized
to
issue
from
10,000,000,000
to
50,000,000,000
on October 1, 2021, the effective date of
the stock split.
7.B
RELATED
PARTY
TRANSACTIONS
Business
Relationships
Toyota
purchases
materials,
supplies
and
services,
among
others,
from
numerous
suppliers
throughout
the
world
in
the
ordinary
course
of
business,
including
Toyota’s
associates
and
joint
ventures
accounted
for
by
the
equity
method
and
those
firms
with
which
certain
members
of
Toyota’s
board
of
directors
are
affiliated.
Toyota
purchased
materials,
supplies
and
services,
among
others,
from
these
associates
and
joint
ventures
in
the
amount
of
¥7,947.0
billion
in
fiscal
2022.
Toyota
also
sells
its
products
and
services,
among
others,
to
Toyota’s
associates
and
joint
ventures
accounted
for
by
the
equity
method
and
firms
with
which
certain
members
of
Toyota’s
board
of
directors
are
affiliated.
Toyota
sold
products
and
services,
among
others,
to
these
associates
and
joint
ventures
entities
in
the
amount
of
¥2,362.3
billion
in
fiscal
2022.
See
note
32
of
Toyota’s
consolidated
financial
statements
for
additional
information
regarding
Toyota’s
investments
in
and
transactions
with
associates and joint ventures.
Loans
Toyota
regularly
has
trade
accounts
and
other
receivables
by,
and
accounts
payable
to,
Toyota’s
associates
and
joint
ventures
accounted
for
by
the
equity
method
and
firms
with
which
certain
members
of
Toyota’s
board
of
directors
are
affiliated.
Toyota
had
outstanding
trade
accounts
and
other
receivables
by
these
associates
and
joint
ventures
in
the
amount
of
¥366.4
billion
as
of
March
31,
2022.
Toyota
had
outstanding
trade
accounts
and
other payables to these associates
and joint ventures in the amount
of ¥1,091.5 billion as of March 31, 2022.
Toyota, from
time
to
time,
provides
short-
to medium-term
loans to
its
associates
and joint
ventures,
as
well
as
loans
under
a
loan
program
established
by
certain
subsidiaries
to
assist
their
executives
and
members
of
the
board
of
directors
with
the
purchase
of
homes.
As
of
March
31,
2022,
an
aggregate
amount
of
¥185.5
billion
in
loans
was
outstanding
to
its
associates
and
joint
ventures
accounted
for
by
the
equity
method.
Toyota
believes
that each of these loans was entered
into in the ordinary course of business.
7.C
INTERESTS
OF
EXPERTS
AND
COUNSEL
Not applicable.
ITEM
8.
FINANCIAL
INFORMATION
8.A
CONSOLIDATED
STATEMENTS
AND
OTHER
FINANCIAL
INFORMATION
1-3.
Consolidated
Financial
Statements.
Toyota’s
audited
consolidated
financial
statements
are
included
under
“Item
18
Financial
Statements.”
Except
for
Toyota’s
consolidated
financial
statements
included
under
Item 18, no other information
in this annual report has been audited
by Toyota’s auditors.
4.
Not applicable.
5.
Not applicable.
6.
Export
Sales.
See
“Operating
and
Financial
Review
and
Prospects
Operating
Results
Overview
Geographic Breakdown.”
7.
Legal
and
Arbitration
Proceedings.
See
“Information
on
the
Company
Business
Overview
Legal
Proceedings.”
8.
Dividend Information.
92
Toyota
normally
pays
dividends
twice
per
year,
including
an
interim
dividend
and
a
year-end
dividend.
Toyota’s
articles
of
incorporation
provide
that
retained
earnings
can
be
distributed
as
dividends
pursuant
to
a
resolution
of
its
board
of
directors.
Toyota’s
board
of
directors
resolves
to
pay
year-end
dividends
to
holders
of
common stock and registered pledgees
of common stock of record as of
March 31, the record date, in each year.
At
the
111th
Ordinary
General
Shareholders’
Meeting
held
in
June
2015,
Toyota’s
shareholders
approved
amendments
to
Toyota’s
articles
of
incorporation
permitting
the
issuance
of
Model
AA
Class
Shares
in
the
future.
Toyota
resolved
at
its
board
of
directors
meeting
held
on
December
14,
2020
to
exercise
Toyota’s
cash
call
option
to
acquire
all
outstanding
First
Series
Model
AA
Class
Shares
and,
subject
to
such
acquisition,
to
cancel
all
First
Series
Model
AA
Class
Shares
pursuant
to
the
Companies
Act.
Toyota
completed
the
acquisition
of
all
outstanding
First
Series
Model
AA
Class
Shares
on
April
2,
2021
and
cancelled
them
on
April
3,
2021.
At
the
117th
Ordinary
General
Shareholders’
Meeting
held
in
June
2021,
Toyota’s
shareholders
approved
amendments
to
Toyota’s
articles
of
incorporation
to,
among
other
things,
eliminate
the
First
Series
Model
AA
Class
Shares
through
the
Fifth
Series
Model
AA
Class
Shares
as
classes
of
Toyota’s
capital
stock,
effective
June 16, 2021.
Prior to
the June
16, 2021
amendment, the articles
of incorporation
provided
that, in the
event that
Toyota
paid
a
year-end
dividend
to
holders
of
common
stock,
it
would pay
a
year-end
dividend
to
any
holders
of
Model
AA
Class
Shares
or
registered
pledgees
of
Model
AA
Class
Shares
of
record
as
of
the
record
date
for
the
year-end
dividend,
in
the
amount
payable
on
the
Model
AA
Class
Shares
pursuant
to
their
terms
(“AA
Dividends”), in preference to holders
of common stock or registered
pledgees of common stock.
In
addition
to
these
year-end
dividends,
Toyota
may
pay
an
interim
dividend
in
the
form
of
cash
distributions
from
its
distributable
surplus
to
holders
of
common
stock
and
pledgees
of
common
stock
of
record
as
of
September
30,
the
record
date,
in
each
year
by
a
resolution
of
its
board
of
directors.
Prior
to
the
June
16,
2021
amendment,
the
articles
of
incorporation
provided
that,
in
the
event
that
Toyota
paid
such
interim
dividends,
Toyota
would
pay
an
amount
equivalent
to
one-half
of
the
AA
Dividends
as
an
interim
dividend
to
any
holders
of
Model
AA
Class
Shares
or
registered
pledgees
of
Model
AA
Class
Shares
of
record
as
of
the
record date
for
the
interim
dividend, in
preference
to
holders
of common
stock
or registered
pledgees
of common
stock.
In
addition,
under
the
Companies
Act,
dividends
may
be
paid
to
holders
of
common
stock
and
pledgees
of
record
of
common
stock
as
of
any
record
date,
other
than
those
specified
above,
as
set
forth
in
Toyota’s
articles
of
incorporation
or
as
determined
by
its
board
of
directors
from
time
to
time.
Under
the
Companies
Act,
dividends
may
be
distributed
in
cash
or
(except
in
the
case
of
interim
dividends
mentioned
in
the
third
preceding
paragraph) in kind, subject to limitations
on distributable
surplus and to certain other
conditions.
The
following
table
sets
forth
the
dividends
declared
per
share
of
common
stock
by
Toyota
for
each
of
the
periods shown.
The periods
shown are the
six months
ended on that
date. The U.S. dollar
equivalents for
the cash
dividends
shown
are
based
on
the
noon
buying
rate
for
Japanese
yen
on
the
last
date
of
each
period
set
forth
below.
Cash
Dividends
per
Common
Share
Period
Ended
Yen
U.S.
dollars
September 30, 2019
.........................................................
100.0
0.92
March 31, 2020
............................................................
120.0
1.11
September 30, 2020
.........................................................
105.0
0.99
March 31, 2021
............................................................
135.0
1.22
September 30, 2021
.........................................................
120.0
1.07
March 31, 2022
............................................................
28.0
1.15
<140.0>*
<0.23>*
*
The
numbers
in
angle
brackets
are
calculated
based
on
a
“pre-stock
split”
basis,
that
is,
on
the
assumption
that
the five-for-one stock split
that Toyota effected on October 1, 2021 had not
taken place.
93
Toyota
deems
the
benefit
of
its
shareholders
as
one
of
its
priority
management
policies,
and
it
will
continue
to
work
to
improve
its
corporate
culture
to
realize
sustainable
growth
in
order
to
enhance
its
corporate
value.
Toyota
will
strive
for
the
stable
and
continuous
payment
of
dividends,
seeking
to
maintain
and
improve
upon
the
consolidated payout ratio of 30% to
its shareholders.
With
a
view
to
surviving
tough
competition
and
transitioning
to
a
mobility
company,
Toyota
will
aim
to
utilize
its
internal
funds
mainly
for
investment
in
growth
for
the
next
generation,
such
as
environmental
technologies
to
achieve
a
carbon-neutral
society
and
safety
technologies
for
the
safety
and
security
of
its
customers, and also for the stakeholders
such as employees, business
partners and local communities.
Considering
these
factors,
with
respect
to
the
dividends
for
fiscal
2022,
Toyota
has
determined
to
pay
a
year-end dividend
of 28
yen (140
yen on a
pre-stock
split basis)
per share
of common stock
by a resolution
of the
board
of
directors
pursuant
to Toyota’s
articles
of
incorporation.
As a
result,
combined
with
the
interim
dividend
of
24
yen
(120
yen
on
a
pre-stock
split
basis)
per
share
of
common
stock,
the
annual
dividend
will
be
52
yen
(260 yen on a pre-stock
split basis)
per share
of common stock,
and the total amount of the dividends
on common
stock for the year will be 718.2 billion
yen.
Furthermore,
Toyota
resolved,
at
its
board
of
directors
meeting
held
on
May
11,
2022,
to
repurchase
up
to
140
million
shares
of
its
common
stock
between
June
17,
2022
and
September
30,
2022
at
a
total
maximum
purchase price of 200 billion yen.
Toyota
intends
to
repurchase
shares
more
flexibly
than
before
with
the
aim
of
promoting
capital
efficiency
by
comprehensively
taking
into
consideration
its
investment
in
growth,
level
of
its
dividends,
its
cash
reserves
and the price level of its common
stock.
Specifically,
of
the
total
maximum
purchase
price
of
200
billion
yen,
a
maximum
of
100
billion
yen will
be
used
for
share
repurchases
that
are
to
be
conducted
more
flexibly
than
before
based
on
factors
such
as
the
price
level of its common stock.
8.B
SIGNIFICANT
CHANGES
Except
as
disclosed
in
this
annual
report,
there
have
been
no
significant
changes
since
the
date
of
Toyota’s
latest annual financial statements.
ITEM
9.
THE
OFFER
AND
LISTING
9.A
LISTING
DETAILS
Shares
of
Toyota
common
stock
are
traded
on
the
Tokyo
Stock
Exchange
and
the
Nagoya
Stock
Exchange
under
the
ticker
symbol
“7203”
in
Japan,
and
on
the
London
Stock
Exchange
under
the
ticker
symbol
“TYT.”
Toyota’s
ADSs,
each
representing
ten
shares
of
Toyota
common
stock,
are
listed
on
the
New
York
Stock
Exchange, or NYSE, under the ticker symbol “TM.”
9.B
PLAN
OF
DISTRIBUTION
Not applicable.
9.C
MARKETS
The primary trading
market for
Toyota’s common stock
is the Tokyo
Stock Exchange. The common stock
is
also listed on the Nagoya Stock Exchange and on the London Stock Exchange.
94
Since
September
29,
1999,
American
Depositary
Shares,
each
equal
to
ten
shares
of
Toyota’s
common
stock,
have
been
traded
and
listed
on
the
New
York
Stock
Exchange
through
a
sponsored
ADS
facility
operated
by
The
Bank
of
New
York
Mellon,
as
Depositary.
Prior
to
that
time,
Toyota’s
ADSs
were
listed
on
the
Nasdaq
SmallCap Market through five unsponsored
ADS facilities.
9.D
SELLING
SHAREHOLDERS
Not applicable.
9.E
DILUTION
Not applicable.
9.F
EXPENSES
OF
THE
ISSUE
Not applicable.
ITEM
10.
ADDITIONAL
INFORMATION
10.A
SHARE
CAPITAL
Toyota resolved
at
its
board
of
directors
meeting
held
on
May
12,
2021
to split
each share
of
common
stock
of
Toyota
as
of
September
30,
2021,
the
record
date,
into
five
shares,
effective
October
1,
2021.
Toyota
decided
to
do
so
in
order
to
create
an
environment
in
which
Toyota
shares
are
more
accessible
to
a
broader
base
of
investors by reducing the price per
investment unit.
In
conjunction
with
the
stock
split,
in
accordance
with
Article
184,
Paragraph
2
of
the
Companies
Act,
Toyota
amended
its
articles
of
incorporation
to
increase
the
total
number
of
shares
of
common
stock
which
Toyota
is
authorized
to
issue
from
10,000,000,000
to
50,000,000,000
on
October
1,
2021,
the
effective
date
of
the stock split.
10.B
MEMORANDUM
AND
ARTICLES
OF
ASSOCIATION
Except
as
otherwise
stated,
set
forth
below
is
information
relating
to
Toyota’s
common
stock,
including
brief summaries
of the relevant provisions
of Toyota’s articles of incorporation
and share handling regulations,
as
currently
in
effect,
and
of
the
Companies
Act,
Act
Concerning
Book-Entry
Transfer
of
Corporate
Bonds,
Shares
and Other Securities and related
legislation.
General
Toyota’s
authorized
number
of
shares
as
of
March
31,
2022
was
50,000,000,000
shares,
of
which
16,314,987,460
shares
of
common
stock
have
been
issued.
In
conjunction
with
the
cancellation
of
all
of
the
Model AA
Class Shares
on
April
3, 2021,
Toyota’s articles
of incorporation
were
amended
at the
117th Ordinary
General Shareholders’ Meeting held
in June 2021.
Toyota
does
not
issue
share
certificates
for
its
shares.
In
accordance
with
the
Companies
Act,
the
Book-
Entry
Transfer
Act
and
Toyota’s
articles
of
incorporation,
Toyota’s
common
stock
are
recorded
or
registered
on
(i)
Toyota’s
register
of
shareholders
and
(ii)
transfer
account
books
of
the
Japan
Securities
Depository
Center,
Inc.
(“JASDEC”)
which
is
a
book-entry
transfer
institution,
and
securities
firms,
banks
or
other
account
management
institutions.
The
transfer
of
common
stock
will
generally
become
effective
once
the
transfer
is
recorded
in
the
transferee’s
account.
There
are
no
restrictions
imposed
by
Toyota’s
articles
of
incorporation
or
share
handling
regulations
on
the
transfer
of
common
stock.
In
order
to
assert
shareholders’
rights
against
95
Toyota,
a
shareholder
must
generally
have
his
or
her
name
and
address
recorded
or
registered
on
Toyota’s
register
of
shareholders.
A
holder
of
common
stock
can
assert
minority
shareholders’
rights
(shareholders’
rights
for
which
Toyota
has
not
set
a
record
date)
against
Toyota
if
JASDEC
provides
an
individual
shareholder
notice
to
Toyota
upon
the
shareholder’s
request.
The
shareholder
of
deposited
shares
underlying
the
ADSs
is
the
Depositary for the ADSs. Accordingly, holders of ADSs will not
be able directly to assert
shareholders’ rights.
A
holder
of
common
stock
must
have
a
transfer
account
to
transfer
shares.
Holders
of
common
stock
who
do
not
have
a
transfer
account
with
JASDEC
must
have
an
account
with
an
account
management
institution
that
directly
or
indirectly
has
a
transfer
account
with
JASDEC.
Once
Toyota
decides
on
the
record
date
for
its
shareholders’
meeting
or
makes
a
request
to
JASDEC
based
on
justifiable
grounds,
JASDEC
will
promptly
provide
to
Toyota
names,
addresses
and
other
information
with
respect
to
the
holders
of
Toyota’s
common
stock
who
are
recorded
on
the
transfer
account
books
of
JASDEC or
account
management
institutions.
Upon
receiving
such
information,
Toyota
will
record
or
register
such
information
received
from
JASDEC
on
its
register
of
shareholders.
Accordingly,
holders
of
common
stock
recorded
or
registered
on
Toyota’s
register
of
shareholders
will
be
treated
as
holders
of
common
stock
of
Toyota
and
may
exercise
rights,
such
as
voting
rights,
and
will
receive
dividends
(if
any)
and
notices
to
holders
of
common
stock
directly
from
Toyota.
Holders
of
common
stock
wishing
to
assert
minority
shareholders’
rights
against
Toyota
must
request
an
individual
shareholder
notice to
JASDEC or
the account
management
institution
at which
the shareholder
has opened
a transfer
account.
In
response
to
such
request,
JASDEC
will
provide
the
individual
shareholders
notice
to
Toyota.
A
holder
of
common stock
may
assert
his
or
her
minority
shareholders’
rights
against
Toyota
for a
period
of
four
weeks
after
the
date
the
individual
shareholder
notice
is
provided
to
Toyota.
The
shares
held
by
a
person
who
is
deemed
to
hold additional shares according
to the transfer account books are
aggregated for these purposes.
Corporate
Purpose
Article
2
of
Toyota’s
articles
of
incorporation
states
that
its
purpose
is
to
engage
in
the
following
businesses:
the manufacture,
sale, leasing and repair
of:
motor
vehicles,
industrial
vehicles,
ships,
aircraft,
other
transportation
machinery
and
apparatus,
spacecraft and space machinery
and apparatus, and parts thereof;
industrial
machinery and apparatus, other
general machinery and apparatus,
and parts thereof;
electrical
machinery and apparatus,
and parts thereof; and
measuring
machinery and apparatus, medical
machinery and apparatus, and parts
thereof;
the manufacture
and sale of ceramics
and products of synthetic resins,
and materials thereof;
the
manufacture,
sale
and
repair
of
construction
materials
and
equipment,
furnishings
and
fixtures
for
residential buildings;
the
planning,
designing,
supervision,
execution and
undertaking of
construction
works, civil
engineering
works, land development, urban development
and regional development;
the sale,
purchase, leasing, brokerage and management
of real estate;
the
service
of
information
processing,
information
communications
and
information
supply
and
the
development, sale and leasing of software;
the
design
and
development
of
product
sales
systems
that
utilize
networks
such
as
the
Internet,
sale,
leasing
and
maintenance
of
computers
included
within
such
systems,
and
sale
of
products
by
utilizing
such systems;
the
inland
transportation,
marine
transportation,
air
transportation,
stevedoring,
warehousing
and
tourism businesses;
96
the
printing,
publishing,
advertising
and
publicity,
general
leasing,
security
and
workers
dispatch
businesses;
the
credit
card
operations,
purchase
and
sale
of
securities,
investment
consulting,
investment
trust
operation, and other financial
services;
the
operation
and
management
of
such
facilities
as
parking
lots,
showrooms,
educational
facilities,
medical care
facilities,
sports
facilities,
marinas, airfields,
food
and drink
stands and
restaurants, lodging
facilities, retail
stores and others;
the non-life
insurance agency business and the
life insurance agency business;
the
production
and
processing
by
using
biotechnology
of
agricultural
products
including
trees,
and
the
sale of such products;
the power generation
and the supply and sale of electric
power;
the sale
of goods related to each of the preceding
items and mineral
oil;
the
conducting
of engineering,
consulting,
invention and
research
relating to
each of
the preceding
items
and the utilization of such invention
and research; and
any businesses
incidental to or related
to any of the preceding items.
Dividends
Dividends
General
Toyota
normally
pays
dividends
twice
per
year,
including
an
interim
dividend
and
a
year-end
dividend.
Toyota’s
articles
of
incorporation
provide
that
retained
earnings
can
be
distributed
as
dividends
pursuant
to
a
resolution
of
its
board
of
directors.
Toyota’s
board
of
directors
resolves
to
pay
year-end
dividends
to
shareholders and registered pledgees
of record as of March 31, the record
date, in each year.
In
addition
to
these
year-end
dividends,
Toyota
may
pay
an
interim
dividend
in
the
form
of
cash
distributions from
its distributable
surplus
to holders of
stock and pledgees
of stock of record
as of September
30,
the record date, in each year by a resolution
of its board of directors.
In
addition,
under
the
Companies
Act,
dividends
may
be
paid
to
shareholders
and
pledgees
of
record
as
of
any
record
date,
other
than
those
specified
above,
as
set
forth
by
Toyota’s
articles
of
incorporation
or
as
determined
by
its
board
of
directors
from
time
to
time.
Under
the
Companies
Act,
dividends
may
be
distributed
in
cash
or
(except
in
the
case
of
interim
dividends
mentioned
in
the
second
preceding
paragraph)
in
kind,
subject
to limitations on distributable
surplus and to certain
other conditions.
Dividends
Distributable
Amount
Under
the
Companies
Act,
Toyota
is
permitted
to
make
distributions
of
surplus
to
the
extent
that
the
aggregate
book
value
of
the
assets
to
be
distributed
to
shareholders
does
not
exceed
the
distributable
amount
provided
for
by
the
Companies
Act
and
the
ordinance
of
the
Ministry
of
Justice
as
at
the
effective
date
of
such
distribution of surplus.
The
amount
of
surplus
at
any
given
time
shall
be
the
amount
of
Toyota’s
assets
and
the
book
value
of
Toyota’s treasury stock after
subtracting and adding the amounts of
items provided for by the Companies
Act and
the
ordinance
of
the
Ministry
of
Justice,
and
the
amount
of
surplus
distributable
for
dividends
is
calculated
by
adding
to
and
subtracting
from
this
amount
the
amounts
of
items
provided
for
by
the
Companies
Act
and
the
ordinance of the Ministry of Justice.
97
Dividends
Prescription
Under
its
articles
of
incorporation,
Toyota
is
not
obligated
to
pay
any
dividends
in
cash
which
are
left
unclaimed for a period of three
years after the date on which they
first became payable.
Capital
Accounts
The amount
of
the
cash
or
assets
paid
or
contributed
by
subscribers
for
new
shares
(with
certain
exceptions)
is
required
to
be
accounted
for
as
stated
capital,
although
Toyota
may
account
for
an
amount
not
exceeding
one-half of such cash or assets as
additional paid-in capital.
Under
the
Companies
Act,
Toyota
may
reduce
its
additional
paid-in
capital
and
legal
reserve
without
limitation
on
the
amount
to
be
reduced,
generally,
by
a
resolution
of
a
general
shareholders’
meeting
and
if
so
decided
by
the
same
resolution,
may
account
for
the
whole
or
any
part
of
the
amount
of
the
reduction
of
additional
paid-in
capital
as
stated
capital.
The
whole
or
any
part
of
surplus
which
may
be
distributed
as
dividends may also be transferred
to stated capital by a resolution
of a general shareholders’
meeting.
Stock
Splits
Toyota
may
at
any
time
split
the
outstanding
shares
into
a
greater
number
of
shares
by
a
resolution
of
the
board
of
directors.
Toyota
must
give
public
notice
of
the
stock
split,
specifying
a
record
date
for
the
stock
split,
not less than two weeks prior to the record
date.
Consolidation
of
Shares
Toyota may at any
time consolidate
shares in issue
into a smaller
number of
shares by a special
shareholders
resolution
(as
defined
in
“Voting
Rights”).
When
a
consolidation
of
shares
is
to
be
made,
Toyota
must
give
public notice of certain matters
two weeks prior to the effective
date of the consolidation.
Japanese
Unit
Share
System
General
.
Consistent
with
the
requirements
of
the
Companies
Act,
Toyota’s
articles
of
incorporation
provide
that
100
shares
constitute
one
“unit.”
Although
the
number
of
shares
constituting
a
unit
is
included
in
the articles
of
incorporation,
any
amendment
to
the
articles
of
incorporation
reducing
(but
not
increasing)
the
number
of
shares
constituting
a
unit
or
eliminating
the
provisions
for
the
unit
of
shares
may
be
made
by
a
resolution
of
the
board
of
directors
rather
than
by
a
special
shareholders
resolution,
which
is
otherwise
required
for
amending
the
articles of incorporation.
Voting
Rights
under
the
Unit
Share
System
.
Under
the
unit
share
system,
shareholders
have
one
voting
right for each unit of shares
that they hold. Any number of shares less
than a full unit will carry no voting
rights.
Purchase
by
Toyota
of
Shares
Constituting
Less
Than
a
Unit
.
A
holder
of
shares
constituting
less
than
a
full
unit
may
require
Toyota
to
purchase
those
shares
at
their
market
value
in
accordance
with
the
provisions
of
Toyota’s share handling regulations
and the Companies Act.
Voting
Rights
Toyota
holds
its
ordinary
general
shareholders’
meeting
each
year.
In
addition,
Toyota
may
hold
an
extraordinary
general
shareholders’
meeting
whenever
necessary
by
giving
at
least
two
weeks’
advance
notice.
Under
the
Companies
Act,
notice
of
any
shareholders’
meeting
must
be
given
to
each
shareholder
having
voting
rights
or,
in
the
case
of
a
non-resident
shareholder,
to
his
or
her
resident
proxy
or
mailing
address
in
Japan
in
accordance with Toyota’s share handling
regulations, at least two weeks prior
to the date of the meeting.
98
Holders
of
common
stock
shall
have
voting
rights
exercisable
at
a
general
shareholders’
meeting.
A
holder
of
shares
constituting
one
or
more
whole
units
is
entitled
to
one
vote
per
unit
of
shares
subject
to
the
limitations
on voting
rights
set
forth
in
this
paragraph.
In
general,
under the
Companies
Act, a
resolution
can
be adopted
at
a
general
shareholders’
meeting
by
a
majority
of
the
shares
having
voting
rights
represented
at
the
meeting.
The
Companies
Act
and
Toyota’s
articles
of
incorporation
require
a
quorum
for
the
election
of
members
of
the
board
of
directors
and
audit
&
supervisory
board
members
of
not
less
than
one-third
of
the
total
number
of
outstanding
shares
having
voting
rights.
Toyota’s
shareholders
are
not
entitled
to
cumulative
voting
in
the
election
of
members
of
the
board
of
directors.
A
corporate
shareholder,
the
management
of
which
is
substantially
under
Toyota’s
control
as
provided
by
an
ordinance
of
the
Ministry
of
Justice,
either
through
the
holding
of
voting
rights or for any other reason, does
not have voting rights.
Pursuant
to
the
amendments
to
the
Companies
Act
with
effect
on
September
1,
2022
which
applies
to
all
Japanese
listed
companies,
including
Toyota,
and
the
amendments
to
its
articles
of
incorporation
approved
at
the
118th
General
Shareholders’
Meeting
held
on
June
15,
2022,
Toyota
will
implement
the
electronic
provision
measures
(“Electronic
Provision”)
for
the
information
contained
in
the
reference
materials,
etc.
for
general
shareholders’ meetings to be
held on or after March 1, 2023.
After
the
Electronic
Provision
goes
into
effect,
the
convocation
notice
of
shareholders’
meeting
must
set
forth
the
information
contained
in
the
reference
materials,
etc.
for
general
shareholders’
meetings
being
provided
through
the
Electronic
Provision
and
the
URL of
the
website
used
for
the
Electronic
Provision,
in
addition
to the
place,
the
time
and
the
purpose
of
the
meeting.
The
information
contained
in
the
reference
materials,
etc.
for
general
shareholders’
meetings
must
be
posted
on
a
website
from
the
earlier
of
the
date
three
weeks
prior
to
the
date
set
for
the
meeting
or
the
date
on
which
the
convocation
notice
of
shareholders’
meeting
is
dispatched
until
the
date
on
which
three
months
have
elapsed
from
the
meeting.
In
general,
any
shareholder
is
entitled
to
request
printed
paper
copies
of
the
information
contained
in
the
reference
materials,
etc.
for
general
shareholders’
meetings by the record date for
voting rights at the relevant
general shareholders’ meeting.
Shareholders
may
exercise
their
voting
rights
by
attending
the
general
shareholders’
meeting
or
in
writing
by
mail.
Shareholders
who
choose
to
exercise
their
voting
rights
by
mail
must
fill
out
and
return
to
Toyota
the
voting
right
exercise
form
enclosed
with
the
convocation
notice
of
the
general
shareholders’
meeting
by
the
date
specified
in
such
convocation
notice.
In
addition,
from
the
general
shareholders’
meeting
for
fiscal
2009,
shareholders
may
exercise
their
voting
rights
through
the
internet.
Shareholders
electing
to
exercise
their
voting
rights
through
the
internet
must
log
on
to
the
“Website
to
Exercise
Voting
Rights”
using
the
login
ID
and
temporary
password
provided
in
the
voting
right
exercise
form
enclosed
with
the
convocation
notice
and
submit
their
votes
by
a
date
specified
in
the
convocation
notice,
following
instructions
appearing
on
the
website.
Institutional
investors
may
also
use
the
Electronic
Proxy
Voting
Platform
operated
by
Investor
Communications
Japan to exercise
their voting rights
through the
use of the
Internet, if such institutional
investor applies
to use the
platform
in
advance.
Shareholders
may
also
exercise
their
voting
rights
through
proxies,
provided
that
those
proxies
are
also
shareholders
who
have
voting
rights.
Toyota
may
refuse
a
shareholder
having
two
or
more
proxies attend a general shareholders’
meeting.
The
Companies
Act
provides
that
a
quorum
of
at
least
one-third
of
outstanding
shares
with
voting
rights
must be present at a shareholders’
meeting to approve any material
corporate actions such
as:
(1)
any
amendment
of
the
articles
of
incorporation
with
certain
exceptions
in
which
a
shareholders’
resolution is not required;
(2)
acquisition
of its own shares from a specific
party;
(3)
consolidation
of shares;
(4)
any
issue
or
transfer
of
its
shares
at
a
“specially
favorable”
price
(or
any
issue
of stock
acquisition
rights
or
bonds
with
stock
acquisition
rights
at
“specially
favorable”
conditions
by
Toyota)
to
any
persons other than shareholders;
99
(5)
the removal
of an audit & supervisory board member;
(6)
the
exemption
of
liability
of
a
director
or
audit
&
supervisory
board
member
with
certain
exceptions;
(7)
a reduction of
stated capital which meets certain
requirements with certain
exceptions;
(8)
a distribution
of in-kind dividends which meets
certain requirements;
(9)
dissolution,
merger,
or consolidation
with certain
exceptions in
which a shareholders’
resolution is
not required;
(10)
the transfer of the whole or a material part of
the business;
(11)
the
transfer
in
entirety
or
in
part
of
shares
or
equity
interest
of
a
subsidiary
under
certain
conditions;
(12)
the
taking
over
of
the
entire
business
of
any
other
corporation
with
certain
exceptions
in
which
a
shareholders’ resolution is
not required;
(13)
share
exchange
or
share
transfer
for
the
purpose
of
establishing
100%
parent-subsidiary
relationships with certain
exceptions in which a shareholders’
resolution is not required;
(14)
company split with certain exceptions in which a shareholders’
resolution is not required;
or
(15)
share delivery with certain exceptions in which a shareholders’
resolution is not required.
At least two-thirds of the shares
having voting rights represented
at the meeting must approve these
actions.
The
voting
rights
of
holders
of
ADSs
are
exercised
by
the
Depositary
based
on
instructions
from
those
holders.
Rights
to
be
Allotted
Shares
Shareholders
have
no
preemptive
rights
under Toyota’s
articles
of incorporation.
Under the
Companies
Act,
the
board
of
directors
may,
however,
determine
that
shareholders
shall
be
given
rights
to
be
allotted
shares
or
stock
acquisition
rights
on
request
in
connection
with
a
particular
issue
or
transfer
of
shares,
or
issue
of
stock
acquisition
rights,
respectively.
In
this
case,
such
rights
must
be
given
on
uniform
terms
to
all
shareholders
as
of
a specified record date by at least
two weeks’ prior public notice
to shareholders of the record date.
Rights
to
be
allotted
shares
are
nontransferable.
However,
a
shareholder
may
be
allotted
stock
acquisition
rights without consideration thereto,
and may transfer such rights.
Liquidation
Rights
In
the
event
of
a
liquidation
of
Toyota,
the
assets
remaining
after
payment
of
all
debts,
liquidation
expenses
and
taxes
will
be
distributed
among
the
shareholders
or
registered
pledgees
in
proportion
to
the
respective
number of shares they own.
Liability
to
Further
Calls
or
Assessments
All
of
Toyota’s
currently
outstanding
shares,
including
shares
represented
by
the
ADSs,
are
fully
paid
and
nonassessable.
Transfer
Agent
Mitsubishi
UFJ Trust
and
Banking
Corporation
is
the
transfer
agent
for all
shares.
Mitsubishi
UFJ
Trust and
Banking
Corporation’s
office
is
located
at
4-5,
Marunouchi
1-chome,
Chiyoda-ku,
Tokyo,
100-8212
Japan.
Mitsubishi
UFJ
Trust
and
Banking
Corporation
maintains
Toyota’s
register
of
shareholders
and
records
transfers
of record ownership (in the case of
common stock, upon receiving notification
from JASDEC).
100
Record
Date
The
close
of
business
on
March
31
is
the
record
date
for
Toyota’s
year-end
dividends,
if
paid.
A
holder
of
shares
constituting
one
or
more
whole
units
who
is
recorded
or
registered
as
a
holder
on
Toyota’s
register
at
the
close
of
business
as
of
March
31
is
also
entitled
to
exercise
shareholders’
voting
rights
at
the
ordinary
general
shareholders’
meeting
with
respect
to
the
business
year
ending
on
March
31.
The
close
of
business
on
September
30
of
each
year
is
the
record
date
for
interim
dividends,
if
paid.
In
addition,
Toyota
may
set
a
record
date for
determining
the shareholders
entitled
to other
rights
and for
other
purposes
by giving
at
least
two weeks’
prior public notice.
The
shares
generally
trade
ex-dividend
or
ex-rights
on
the
Japanese
stock
exchanges
on
the
business
day
preceding
a
record
date
(or
if
the
record
date
is
not
a
business
day,
one
business
day
prior
thereto),
for
the
purpose of dividends or rights offerings.
Acquisition
by
Toyota
of
Shares
Toyota
may
acquire
its
own
shares
(i)
through
a
stock
exchange
on
which
such
shares
are
listed
or
by
way
of
tender
offer
(pursuant
to
an
ordinary
resolution
of
a
general
shareholders’
meeting
or
a
resolution
of
the
board
of
directors),
(ii)
by
purchase
from
a
specific
party
(pursuant
to
a
special
resolution
of
a
general
shareholders’
meeting)
or
(iii)
from
a
subsidiary
of
Toyota
(pursuant
to
a
resolution
of
the
board
of
directors).
When
such
acquisition
of
shares
is
made
by
Toyota
from
a
specific
party
other
than
a
subsidiary
of
Toyota,
any
other
shareholder
may
make
a
demand
to
a
representative
director,
more
than
five
calendar
days
prior
to
the
relevant
shareholders’
meeting,
that
Toyota
also
purchase
the
shares
held
by
such
holder.
However,
the
acquisition
of
its
own shares
at
a price
not
exceeding
the market
price
to
be provided
under
an
ordinance of
the
Ministry
of
Justice
will
not
trigger
the
right
of
any
shareholder
to
include
him/her
as
the
seller
of
his/her
shares
in
such
proposed
purchase.
Any
acquisition
of
shares
must
satisfy
certain
requirements
that
the
total
amount
of
the
acquisition
price
may not exceed the amount of the distributable
dividends. See “— Dividends.”
Shares
acquired
by
Toyota
may
be
held
by
it
for
any
period
or
may
be
cancelled
by
resolution
of
the
board
of
directors.
Toyota
may
also
transfer
to
any
person
the
shares
held
by
it,
subject
to
a
resolution
of
the
board
of
directors, and
subject also
to other
requirements
applicable
to the
issuance of
new shares.
Toyota may
also utilize
its
treasury
stock
for
the
purpose
of
transfer
to
any
person
upon
exercise
of
stock
acquisition
rights
or
for
the
purpose
of
acquiring
another
company
by
way
of
merger,
share
exchange
or
corporate
split
through
exchange
of
treasury stock for shares or
assets of the acquired company.
The Companies Act generally prohibits any
subsidiary of Toyota from acquiring
shares of Toyota.
Report
of
Substantial
Shareholdings
The
Financial
Instruments
and
Exchange
Law
of
Japan
and
regulations
under
the
Law
require
any
person
who
has
become
a
holder
(together
with
its
related
persons)
of
more
than
5%
of
the
total
issued
shares
of
a
company
listed
on
any
Japanese
stock
exchange
(including
ADSs
representing
such
shares)
to
file
with
the
Director
of
a
competent
Local
Finance
Bureau,
within
five
business
days,
a
report
concerning
those
shareholdings. A
similar report
must
also be
filed to
reflect
any change
of 1% or more
in any shareholding
or any
change in
material
matters set
out in
reports
previously filed.
Any such
report shall
be
filed with
the Director
of a
competent
Local
Finance
Bureau
through
the
Electronic
Disclosure
for
Investor’s
Network
(“EDINET”)
system.
For
this
purpose,
shares
issuable
to
a
shareholder
upon
exercise
of stock
acquisition
rights
are
taken
into
account
in
determining
both
the
number
of
shares
held
by
that
stock
acquisition
rights
holder
and
the
company’s
total
issued shares.
101
10.C
MATERIAL
CONTRACTS
All
contracts
concluded
by
Toyota
during
the
two
years
preceding
this
filing
were
entered
into
in
the
ordinary course of business.
10.D
EXCHANGE
CONTROLS
The
following
is
a
general
summary
of
major
Japanese
foreign
exchange
control
regulations
applicable
to
holders
of
shares
of
capital
stock
or
voting
rights
(including
ADSs)
of
Toyota,
and
to
others
intending
to
consummate
other
actions
such
as obtaining
consent from
other
investors
holding
voting
rights
and consenting
to
certain
proposals
at
a
general
shareholders
meeting,
who
are
“exchange
non-residents”
or
“foreign
investors,”
as
described
below.
The
statements
regarding
Japanese
foreign
exchange
control
regulations
set
forth
below
are
based
on
the
laws
and
regulations
in
force
and
as
interpreted
by
the
Japanese
authorities
as
of
the
date
of
this
annual
report
and
are
subject
to
subsequent
changes
in
the
applicable
Japanese
laws
or
interpretations
thereof.
This
summary
is
not
exhaustive
of
all
possible
foreign
exchange
control
considerations
that
may
apply
to
a
particular
investor,
and
potential
investors
are
advised
to
satisfy
themselves
as
to
the
overall
foreign
exchange
control
consequences
of
the
acquisition,
ownership
and
disposition
of
shares
of
capital
stock
or
voting
rights
of
Toyota by consulting their own advisors.
The
Foreign
Exchange
and
Foreign
Trade
Act
of
Japan
(Act
No.
228
of
1949,
as
amended,
the
“FEFTA”)
and
the
cabinet
orders
and
ministerial
ordinances
thereunder
(collectively,
the
“Foreign
Exchange
Regulations”)
govern
the
acquisition
and
holding
of
shares
of
capital
stock
and
voting
rights
of
Toyota
by
“exchange
non-residents”
and
by
“foreign
investors.”
The
Foreign
Exchange
Regulations
currently
in
effect
do
not,
however,
affect
transactions
between
exchange
non-residents
to
purchase
or
sell
shares
outside
Japan
using
currencies other than Japanese
yen.
Exchange non-residents are:
(i)
individuals who do not reside in Japan; and
(ii)
corporations whose principal offices
are located outside Japan.
Generally, branches and
other offices
of non-resident
corporations that
are located within
Japan are regarded
as
residents
of
Japan.
Conversely,
branches
and
other
offices
of
Japanese
corporations
located
outside
Japan
are
regarded as exchange non-residents.
Foreign investors are:
(i)
individuals who are exchange non-residents;
(ii)
corporations
or
other
organizations
that
are
organized
under
the
laws
of
foreign
countries
or
whose
principal offices are located
outside of Japan;
(iii)
Japanese
corporations
of
which
50%
or
more
of
their
total
voting
rights
are
held
directly
or
indirectly
by
individuals
who
are
exchange
non-residents
and/or
corporations
or
other
organizations
falling
within (i) and/or (ii) above;
(iv)
partnerships
under
the
Civil
Code
of
Japan
(Act
No.
89
of
1896,
as
amended)
established
to
invest
in
corporations,
limited
partnerships
for
investment
under
the
Limited
Partnership
Act
for
Investment
of
Japan
(Act
No. 90
of
1998,
as
amended),
or
any
other
similar
partnerships
under
foreign
law,
of
which
(a)
50%
or
more
of
the
total
contributions
are
made
by
individuals
and/or
corporations
falling
within
(i),
(ii),
(iii)
above
and/or
(v)
below
or
any
other
persons
prescribed
under
the
Foreign
Exchange
Regulations
or
(b)
a
majority
of
the
general
partners
are
individuals
and/or
corporations
falling
within
(i),
(ii),
(iii)
above
and/or
(v)
below
or
any
other
persons
prescribed
under
the
Foreign
Exchange
Regulations; and
102
(v)
corporations
or
other
organizations,
a
majority
of
whose
officers,
or
officers
having
the
power
of
representation, are individuals
who are exchange non-residents.
Acquisition
of
Shares
In
general,
the
acquisition
of
shares
of
a
Japanese
company
(such
as
the
shares
of
capital
stock
of
Toyota)
by
an
exchange
non-resident
from
a
resident
of
Japan
is
not
subject
to
any
prior
filing
requirements
(other
than
those
relating
to
an
“inward
direct
investment”
set
out
below).
In
certain
limited
circumstances,
however,
the
Minister
of
Finance
may
require
prior
approval
of
an
acquisition
of
this
type.
While
prior
approval,
as
described
above,
is
not
required
in
general,
in
the
case
where
a
resident
of
Japan
transfers
shares
of
a
Japanese
company
(such
as
the
shares
of
capital
stock
of
Toyota)
for
consideration
exceeding
¥100
million
to
an
exchange
non-resident,
the
resident
of
Japan
who
transfers
the
shares
is
required
to
report
the
transfer
to
the
Minister
of
Finance
within
20
days
from
the
date
of
the
transfer
or
the
date
of
receipt
of
payment,
whichever
comes
later,
unless
(i)
the
transfer
was
made
through
a
bank
or
financial
instruments
business
operator
licensed
or
registered
under
Japanese
law
or
other
entity
prescribed
by
the
Foreign
Exchange
Regulations
acting
as
an
agent
or
intermediary or (ii)
the acquisition constitutes
an “inward direct investment”
described below.
Inward
Direct
Investment
in
Shares
of
Listed
Companies
On
May
8,
2020,
an
amendment
to
the
Foreign
Exchange
Regulations
came
into
effect.
Upon
the
full
implementation
of
the
Amendment
as
of
June
7,
2020,
the
requirements
and
procedures
regarding
the
prior
notifications of
inward direct investments
to the
Minister of
Finance and any other
competent Ministers
under the
FEFTA,
were
amended.
After
the
implementation
of
the
Amendment,
Japanese
listed
companies
are
classified
into the following categories:
(i)
companies
engaged
in
businesses
excluding
certain
businesses
designated
by
the
Foreign
Exchange
Regulations as designated businesses
(the “Designated Businesses”);
(ii)
companies
engaged
in
Designated
Businesses
designated
by
the
Foreign
Exchange
Regulations
as
core
sector businesses (the “Core Sector
Designated Businesses”); and
(iii)
corporations
engaged
in
Designated
Businesses
other
than
the
Core
Sector
Designated
Businesses
(the
“Non-Core Sector Designated Businesses”).
For reference
purposes only,
the Minister
of
Finance publishes,
and may
update from
time
to time, a list
that
classifies
Japanese
listed
companies
into
the
above
categories.
According
to
the
list
published
by
the
Minister
of
Finance
as
of
July
10,
2020,
the
businesses
which
are
currently
engaged
in
by
Toyota
are
classified
as
category
(ii) i.e., the Core Sector Designated
Businesses above.
Definition
of
Inward
Direct
Investment
If a foreign
investor acquires
shares or
voting rights
of a Japanese company
that is
listed on a
Japanese stock
exchange (such
as the
shares of
capital stock
of Toyota)
and, as
a result
of the acquisition,
the foreign
investor, in
combination
with
any
existing
holdings,
directly
or
indirectly
holds
1%
or
more
of
the
issued
shares
or
the
total
number
of
voting
rights
of
the
relevant
company,
such
acquisition
constitutes
an
“inward
direct
investment.”
In
addition,
an
acquisition
of
the
authority
to
exercise,
or
instruct
to
exercise,
voting
rights
held
by
other
shareholders
that
results
in
the
foreign
investor,
in
combination
with
any
existing
shareholding,
directly
or
indirectly
holding
1%
or
more
of
the
total
number
of
voting
rights
of
the
relevant
company
constitutes
an
“inward direct
investment.”
Furthermore,
if
a
foreign
investor manages,
on
a discretionary
basis, shares
or voting
rights
of
a
Japanese
company
that
is
listed
on
a
Japanese
stock
exchange
and
in
combination
with
any
existing
management,
directly
or
indirectly
manages
1%
or
more
of
the
issued
shares
or
the
total
number
of
voting
rights
of
the
relevant
company,
such
discretionary
investment
management
generally
constitutes
an
“inward
direct
investment.”
103
In
addition
to
the
acquisitions
of
shares
or
voting
rights
described
above,
if
a
foreign
investor
(i)
is
granted
the
authority
to
exercise
proxy
voting
rights
on
behalf
of
other
shareholders
of
the
relevant
company
regarding
certain
matters
which
may
control
substantially
or
have
a
material
influence
on
the
management
of
such
company,
such
as
the
election
or
removal
of
directors,
or
(ii)
obtains
consent
from
another
foreign
investor
holding
the
voting
rights
of
the
relevant
company
to
exercise
the
voting
rights
of
such
company
jointly,
and,
in
each
case,
as
a
result
of
these
arrangements,
the
number
of
the
voting
rights
directly
or
indirectly
held
by
the
foreign
investor,
including
the
total
number
of
the
voting
rights
subject
to
such
proxy,
or
the
sum
of
the
number
of
the
voting
rights
directly
or
indirectly
held
by
the
foreign
investor
and
such
other
foreign
investors
subject
to
such
joint
voting
agreement,
as
the
case
may
be,
is
10%
or
more
of
the
total
number
of
voting
rights
of
the
relevant
company,
each
such
arrangement
regarding
voting
rights
(hereinafter
referred
to
as
a
“voting
arrangement”)
also
constitutes
an
“inward
direct
investment.”
Additionally,
if
a
foreign
investor
who
directly
or
indirectly holds
1% or
more of
the total
voting
rights of
a Japanese
listed
company consents,
at a
general meeting
of
shareholders,
to
certain
proposals
having
a
material
influence
on
the
management
of
such
company
such
as
(i)
election
of
such
foreign
investor
or
its
related
persons
(as
defined
in
the
Foreign
Exchange
Regulations)
as
directors
or
audit
&
supervisory
board
members
of
the
relevant
company
or
(ii)
transfer
or
discontinuation
of
its
business, such consent will also constitute
an “inward direct investment.”
Prior
Notification
Requirements
If
a
foreign
investor
intends
to
consummate
an
“inward
direct
investment”
as
described
above,
in
certain
circumstances,
such
as
where
the
foreign
investor
is
in
a
country
that
is
not
listed
on
an
exemption
schedule
in
the
Foreign
Exchange
Regulations
or
where
that
Japanese
company
is
engaged
(as
Toyota
is
currently)
in
one
or
more
Designated
Businesses,
prior
notification
of
the
relevant
inward
direct
investment
must
be
filed
with
the
Minister of Finance and any other competent
Ministers.
However,
a
foreign
investor
seeking
to
consummate
an
“inward
direct
investment”
may
be
eligible
for
the
exemptions, if certain conditions
are met.
In
the
case
of
an
acquisition
(including
investment
discretionary
management)
of
shares
or
voting
rights
or
the
authority
to
exercise,
directly
or
through
instructions,
voting
rights
of
a
Japanese
listed
company
that
is
engaged
(as
Toyota
is
currently)
in
one
or
more
Core
Sector
Designated
Businesses,
the
foreign
investor
may
be
exempted
from
the
prior
notification
requirement,
if,
as
a
result
of
such
acquisition,
the
foreign
investor
directly
or
indirectly
holds
less
than
10%
of
the
total
number
of
issued
shares
or
voting
rights
of
the
relevant
company,
and such foreign investor complies
with the following conditions:
(i)
the foreign investor
or its closely-related
persons
(as defined
in the Foreign Exchange
Regulations) will
not become directors or audit
& supervisory board members of the
relevant company;
(ii)
the
foreign
investor
will
not
make
certain
proposals
(as
prescribed
in
the
Foreign
Exchange
Regulations)
at
a
general
meeting
of
shareholders,
including
transfer
or
discontinuation
of
the
Designated Businesses of the relevant
company;
(iii)
the
foreign
investor
will
not
access
non-public
technical
information
in
relation
to
the
Designated
Businesses
of
the
relevant
company,
or
take
certain
other
actions
that
may
lead
to
the
leak
of
such
non-public technical information
(as prescribed in the Foreign
Exchange Regulations);
(iv)
the
foreign
investor
will
not
attend,
and
will
not
cause
any
persons
designated
by
it
to
attend,
meetings
of
the
relevant
company’s
board
of
directors,
or
meetings
of
committees
having
authority
to
make
important decisions, in respect
of the Core Sector Designated Businesses
of the relevant company; and
(v)
the
foreign
investor
will
not
make,
and
will
not
cause
any
persons
designated
by
it
to
make,
proposals
to
such
board
or
committees
or
their
members
in
writing
or
electronic
form
requesting
any
response
or
actions
by
certain
deadlines
in
respect
of
the
Core
Sector
Designated
Businesses
of
the
relevant
company.
104
In
addition,
in
the
case
of
an
acquisition
(including
investment
discretionary
management)
of
shares
or
voting
rights
or
the
authority
to
exercise,
either
directly
or
through
instructions,
voting
rights
of
a
Japanese
listed
company
that
is
engaged
in
one
or
more
Non-Core
Sector
Designated
Businesses,
the
foreign
investor
may
be
exempted
from
the
prior
notification
requirement,
including
in
the
case
where,
as
a
result
of
such
acquisition,
the
foreign
investor
holds
10%
or
more
of
the
total
number
of
issued
shares
or
the
total
number
of
voting
rights
of
the
relevant
company,
which
would
have
required
prior
notification,
if
such
foreign
investor
complies
with
the
conditions (i) through (iii)
above (the “Exemption Conditions”).
Notwithstanding
the
above,
if
a
foreign
investor
falls
under
a
category
of
disqualified
investors
designated
by
the
Foreign
Exchange
Regulations
(including
(a)
investors
who
have
records
of
certain
sanctions
due
to
violations
of
the
FEFTA
and
(b)
certain
investors
who
are
state-owned
enterprises
or
other
related
entities
excluding those
who are
accredited by
the Minister
of
Finance), in
no event
may such
foreign investor
be eligible
for
the
exemptions
described
above.
On
the
other
hand,
if
a
foreign
investor,
excluding
the
disqualified
investors
described
in
the
foregoing
sentence,
falls
under
a
category
of
certain
foreign
financial
institutions
(as
prescribed
in
the
Foreign
Exchange
Regulations)
and
complies
with
the
Exemption
Conditions,
such
foreign
investor
may
be
eligible
for
the
exemptions,
even
if
the
acquisition
results
in
such
foreign
investor’s
directly
or
indirectly
holding
10%
or
more
of
the
total
number
of
issued
shares
or
voting
rights
of
a
corporation
engaged
in
one
or
more Core Sector Designated Businesses.
In
addition,
if
a
foreign
investor
intends
to
make
a
voting
arrangement
with
respect
to
a
Japanese
listed
company
engaged
one
or
more
Designated
Businesses
or
consents
to
a
proposal
at
a
general
meeting
of
shareholders
of such company,
in
each case,
that constitutes
an “inward
direct
investment”
as described
above, in
certain
circumstances,
prior
notification
of
the
relevant
inward
direct
investment
must
be
filed
with
the
Minister
of Finance
and
any other
competent
Ministers.
However,
the exemptions
from
the prior
notification
requirements
may
be
available
in
the
cases
where
the
relevant
voting
arrangement
is
regarding
matters
other
than
certain
matters
which
may
control
substantially
or
have
a
material
influence
on
the
management
of
the
relevant
company, such as the election or removal
of directors, which would have required
prior notification.
Acquisitions of
shares
by
foreign investors
by
way
of stock
split are
not subject
to
the foregoing
notification
requirements.
Procedures
for
Prior
Notification
If such
prior
notification
is
filed, the
proposed
inward
direct investment
may
not be
consummated until
after
30 days have
passed from
the
date of
filing, although
this screening
period may
be shortened to
two weeks unless
such Ministers
deem it
necessary
to review
the
proposed inward
direct
investment.
The
Ministers
may extend
the
screening period
up to
five months
if they
deem it
necessary to
review the proposed
inward direct
investment and
may
recommend
any
modification
or
abandonment
of
the
proposed
inward
direct
investment
and,
if
the
foreign
investor does not
accept such recommendation,
the Ministers may order
the modification or abandonment
of such
inward
direct
investment.
In
addition,
if
the
Ministers
consider
the
proposed
inward
direct
investment
to
be
an
inward
direct
investment
that
is likely
to
cause
damage
to
the
national
security
of
Japan
and,
if
a
foreign
investor
(i)
consummates
such
inward
direct
investment
without
filing
the
prior
notification
described
above;
(ii)
consummates
such
inward
direct
investment
before
the
expiration
of
the
screening
period
described
above;
(iii)
in
connection
with
such
inward
direct
investment,
makes
false
statements
in
the
prior
notification
described
above;
or
(iv)
does
not
follow
the
recommendation
or
order
issued
by
the
Ministers
to
modify
or
abandon
such
inward
direct
investment,
the
Ministers
may
order
such
foreign
investor
to
dispose
of
all
or
part
of
the
shares
acquired or take other measures.
105
Post
Facto
Reporting
Requirements
A
foreign
investor
who
consummates
an
inward
direct
investment
as
described
above
relating
to
a
Japanese
listed
company
that
is
engaged
in
one
or
more
Designated
Businesses,
but
is
not
subject
to
the
prior
notification
requirements
described
above
due
to
the
exemptions
from
such
prior
notification
requirements,
in
general,
must
file
a
report
of
the
relevant
inward
direct
investment
with
the
Minister
of
Finance
and
any
other
competent
Ministers
having
jurisdiction
over
such
Japanese
company
within
45
days
of
such
inward
direct
investment
when,
as
a
result
of
such
acquisition,
the
foreign
investor
(excluding,
in
the
cases
of
(i)
and
(ii)
below,
a
foreign
investor
who
falls
under
a
category
of
certain
foreign
financial
institutions
(as
prescribed
in
the
Foreign
Exchange Regulations))
directly
or
indirectly
holds
(i) 1%
or
more
but less
than
3% of
the
total number
of issued
shares
or
voting
rights,
for
the
first
time,
(ii)
3%
or
more
but
less
than
10%
of
the
total
number
of
issued
shares
or voting rights, for the first
time, or (iii) 10% or
more of the total number of
issued shares or voting rights.
In
addition,
if
a
foreign
investor
consummates
the
inward
direct
investment
described
above
through
the
acquisition
(including
investment
discretionary
management)
of
shares
or
voting
rights
or
the
authority
to
exercise,
directly
or
through
instructions,
voting
rights
of
a
Japanese
listed
company
that
is
not
engaged
in
the
Designated
Businesses
(which
is
not
subject
to
the
prior
notification
requirements
described
above)
and,
as
a
result
of
such
acquisition,
such
foreign
investor
holds
10%
or
more
of
shares
or
voting
rights
of
the
total
number
of
issued
shares
or
voting
rights
of
the
relevant
company,
such
foreign
investor
must
file
a
report
of
the
relevant
inward
direct
investment
with
the
Minister
of
Finance
and
any
other
competent
Ministers
having
jurisdiction
over such Japanese company within 45 days of such inward
direct investment.
Additionally,
if
a
foreign
investor
consummates
the
inward
direct
investment
described
above
through
a
voting
arrangement
with
respect
to
a
Japanese
listed
company
that
is
not
engaged
in
the
Designated
Businesses
(which
is
not
subject
to
the
prior
notification
requirements
described
above),
such
foreign
investor
must
file
a
report
of
the
relevant
inward
direct
investment
with
the
Minister
of
Finance
and
any
other
competent
Ministers
having jurisdiction over such Japanese
company within 45 days of such inward direct
investment.
Acquisitions of
shares
by
foreign investors
by
way
of stock
split are
not subject
to
the foregoing
notification
requirements.
Dividends
and
Proceeds
of
Sale
Under
the
Foreign
Exchange
Regulations,
dividends
paid
on,
and
the
proceeds
of
sales
in
Japan
of,
shares
held
by
non-residents
of
Japan
may
in
general
be
converted
into
any
foreign
currency
and
repatriated
abroad.
Under
the
terms
of
the
deposit
agreement
pursuant
to
which
Toyota’s
ADSs
are
issued,
the
Depositary
is
required,
to
the
extent
that
in
its
judgment
it
can
convert
yen
on
a
reasonable
basis
into
dollars
and
transfer
the
resulting
dollars
to
the
United
States,
to
convert
all
cash
dividends
that
it
receives
in
respect
of
deposited
shares
into
dollars
and
to
distribute
the amount
received
(after
deduction
of
applicable
withholding
taxes)
to
the
holders
of ADSs.
10.E
TAXATION
The
following
discussion
is
a
general
summary
of
the
principal
U.S.
federal
income
and
Japanese
national
tax
consequences
of
the
acquisition,
ownership
and
disposition
of
shares
of
common
stock
or
ADSs.
This
summary
does
not
purport
to
address
all
material
tax
consequences
that
may
be
relevant
to
holders
of
shares
of
common
stock
or
ADSs,
and
does
not
take
into
account
the
specific
circumstances
of
any
particular
investors,
some of
which
(such
as
tax-exempt
entities,
banks,
insurance
companies,
broker-dealers,
traders
in securities
that
elect
to
use
a
mark-to-market
method
of
accounting
for
their
securities
holdings,
regulated
investment
companies, real
estate
investment
trusts,
partnerships
and
other
pass-through
entities,
investors
liable for
the
U.S.
alternative
minimum
tax,
investors
that
own
or
are
treated
as
owning
10%
or
more
of
Toyota’s
stock
(by
vote
or
value),
investors
that
hold
shares
of
common
stock
or
ADSs
as
part
of
a
straddle,
hedge,
conversion
transaction
106
or
other
integrated
transaction
and
U.S.
Holders
(as
defined
below)
whose
functional
currency
is
not
the
U.S.
dollar)
may
be
subject
to
special
tax
rules.
This
summary
is
based
on
the
tax
laws
and
regulations
of
the
United
States
and
Japan,
judicial
decisions,
published
rulings
and
administrative
pronouncements
all
as
in
effect
on
the
date
hereof,
as
well
as
on
the
current
income
tax
convention
between
the
United
States
and Japan
(the
“Treaty”),
as
described
below,
all
of
which
are
subject
to
change
(possibly
with
retroactive
effect),
and
to
differing
interpretations.
For
purposes
of
this
discussion,
a
“U.S.
Holder”
is
any
beneficial
owner
of
shares
of
common
stock
or
ADSs that, for U.S. federal income tax purposes,
is:
1.
an individual
who is a citizen or resident
of the United States;
2.
a
corporation
(or
other
entity
taxable
as
a
corporation
for
U.S.
federal
income
tax
purposes)
organized in or under the laws of the United
States, any state thereof, or
the District of Columbia;
3.
an estate
the income of which is subject
to U.S. federal income tax without regard
to its source; or
4.
a
trust
that
is
subject
to
the
primary
supervision
of
a
U.S.
court
and
the
control
of
one
or
more
U.S.
persons,
or
that
has
a
valid
election
in
effect
under
applicable
Treasury
regulations
to
be
treated as a U.S. person.
An “Eligible U.S. Holder” is a U.S. Holder that:
1.
is a resident
of the United States for
purposes of the Treaty;
2.
does
not
maintain
a
permanent
establishment
in
Japan
(a)
with
which
the
shares
of
common
stock
or
ADSs are
effectively
connected
and
through
which
the
U.S. Holder
carries
on
or
has
carried
on
business,
or
(b)
of
which
the
shares
of
common
stock
or
ADSs
form
part
of
the business
property;
and
3.
is
eligible
for
benefits
under
the
Treaty
with
respect
to
income
and
gain
derived
in
connection
with the shares of common stock or ADSs.
This
summary
does
not
address
any
aspects
of
U.S.
federal
tax
law
other
than
income
taxation
and
does
not
discuss
any
aspects
of
Japanese
taxation
other
than
income
taxation,
as
limited
to
national
taxes,
inheritance
and
gift
taxation.
This
summary
also
does
not
cover
any
state
or
local,
or
non-U.S.,
non-Japanese
tax
considerations.
Investors are
urged
to
consult their
tax
advisors
regarding
the U.S. federal,
state
and local
and Japanese
and other
tax
consequences
of
acquiring,
owning
and
disposing
of
shares
of
common
stock
or
ADSs.
In
particular,
where
relevant, investors
are
urged to
confirm their
status
as Eligible
U.S. Holders
with their
tax advisors and
to discuss
with
their
tax
advisors
any
possible
consequences
of
their
failure
to
qualify
as
Eligible
U.S. Holders.
In
addition,
this
summary
is
based
in
part
upon
the
representations
of
the
Depositary
and
the
assumption
that
each
obligation
in the deposit agreement, and in any
related agreement, will be performed
in accordance with its
terms.
In
general,
for
purposes
of
the
Treaty
and
for
U.S.
federal
income
and
Japanese
income
tax
purposes,
owners
of
American
Depositary
Receipts
evidencing
ADSs
will
be
treated
as
the
owners
of
the
shares
of
common
stock
represented
by
those
ADSs,
and
exchanges
of
shares
of
common
stock
for
ADSs,
and
exchanges
of ADSs for shares of common stock, will not
be subject to U.S. federal income or Japanese
income tax.
The
discussion
below
is
intended
for
general
information
only
and
does
not
constitute
a
complete
analysis
of
all
tax
consequences
relating
to
ownership
of
shares
of
common
stock
or
ADSs.
Prospective
purchasers
of
shares
of
common
stock
or
ADSs
should
consult
their
own
tax
advisors
concerning
the
tax
consequences
of
their
particular
situations.
Japanese
Taxation
The
following
is
a
summary
of
the
principal
Japanese
tax
consequences
(limited
to
national
taxes)
to
non-residents
of
Japan
or
non-Japanese
corporations
without
permanent
establishments
in
Japan
(“non-resident
107
Holders”)
who
are
holders
of
shares
of
common
stock
or
of
ADSs
of
Toyota.
The
following
information
regarding
taxation
in
Japan
is
based
on
the
tax
treaties
and
tax
laws
in
force
and
their
interpretation
by
Japan’s
tax
authorities
as
of
the
date
of
this
annual
report.
Tax
laws
and
treaties
and
their
interpretations
may
change
(including with retroactive
effect).
Toyota will not revise this
summary on the basis of any such change occurring
after the date of this annual
report.
Generally,
non-resident
Holders
are
subject
to
Japanese
withholding
tax
on
dividends
paid
by
Japanese
corporations. Stock splits are,
in general, not taxable events.
In
the
absence
of
an
applicable
income
tax
treaty,
convention
or
agreement
reducing
the
maximum
rate
of
Japanese
withholding
tax
or
allowing
an
exemption
from
Japanese
withholding
tax,
the
rate
of
Japanese
withholding
tax
applicable
to
dividends
paid
by
Japanese
corporations
to
non-resident
Holders
is
generally
20.42
percent,
provided
that,
with
respect
to
dividends
paid
on
listed
shares
issued
by
a
Japanese
corporation
(such
as
the
shares
of
common
stock
or
ADSs
of
Toyota)
to
non-resident
Holders,
other
than
any
non-resident
Holder
who
is
an
individual
holding
three
percent
or
more
of
the
total
issued
shares
of
the
relevant
Japanese
corporation,
the
aforementioned
20.42
percent
withholding
tax
rate
is
reduced
to
15.315
percent
for
dividends
due
and
payable
on
or
before
December
31,
2037.
These
rates
include
a
special
additional
withholding
tax
(2.1
percent
of
the
original
withholding
tax
amount)
to
secure
funds
for
reconstruction
from
the
Great
East
Japan
Earthquake.
At
the
date
of
this
annual
report,
Japan
has
income
tax
treaties,
conventions
or
agreements
whereby
the
above-mentioned
withholding
tax
rate
is
reduced,
in
most
cases
to
15
percent,
ten
percent
or
five
percent
for
portfolio
investors
(15
percent
under
the
income
tax
treaties
in
force
with,
among
other
countries,
Canada,
Denmark,
Finland,
Germany,
Iceland,
Ireland,
Italy,
Luxembourg,
New
Zealand,
Norway
and
Singapore,
ten
percent
under
the
income
tax
treaties
with,
among
other
countries,
Australia,
Austria,
Belgium,
France,
Hong
Kong, the Netherlands, Portugal,
Sweden, Switzerland,
the U.K. and the United
States, and five percent
under the
income tax treaties with, among
others, Spain).
Under
the
Treaty,
the
maximum
rate
of
Japanese
withholding
tax
which
may
be
imposed
on
dividends
paid
by
a
Japanese
corporation
to
an
Eligible
U.S.
Holder
that
is
a
portfolio
investor
is
generally
reduced
to
ten
percent of
the gross
amount actually
distributed,
and dividends
paid
by a Japanese
corporation to an
Eligible U.S.
Holder
that
is
a
pension
fund
(as
defined
in
the
Treaty)
are
exempt
from
Japanese
income
tax
by
way
of
withholding
or
otherwise,
provided
that
such
dividends
are
not
derived
from
the
carrying
on
of
a
business,
directly or indirectly, by such
pension fund.
If
the
maximum
tax
rate
provided
for
in the
income
tax
treaty
applicable
to dividends
paid
by
Toyota
to
any
particular
non-resident
Holder is
lower
than the
withholding
tax
rate
otherwise applicable
under
Japanese
tax
law
or if
any particular
non-resident
Holder is exempt
from Japanese income
tax with respect
to such
dividends under
the
income
tax
treaty
applicable
to
such
particular
non-resident
Holder,
such
non-resident
Holder
who
is
entitled
to
a
reduced
rate
of
or
exemption
from
Japanese
withholding
tax
on
the
payment
of
dividends
on
shares
of
common
stock
by
Toyota
is
required
to
submit
an
Application
Form
for
Income
Tax
Convention
Regarding
Relief
from
Japanese
Income
Tax
and
Special
Income
Tax
for
Reconstruction
on
Dividends
(together
with
any
other
required
forms
and
documents)
in
advance
through
the
withholding
agent
to
the
relevant
tax
authority
before
the
payment
of
dividends.
A
standing
proxy
for
non-resident
Holders
of
a
Japanese
corporation
may
provide
this
application
service.
In
addition,
a
simplified
special
filing
procedure
is
available
for
non-resident
Holders
to
claim
treaty
benefits
of
exemption
from
or
reduction
of
Japanese
withholding
tax
by
submitting
a
Special
Application
Form
for
Income
Tax
Convention
Regarding
Relief
from
Japanese
Income
Tax
and
Special
Income
Tax
for
Reconstruction
on
Dividends
of
Listed
Stock
(together
with
any
other
required
forms
and
documents).
With
respect
to
ADSs,
this
reduced
rate
or
exemption
is
applicable
if
the
Depositary
or
its
agent
submits,
together
with
other
documents,
two
Special
Application
Forms
(one
before
payment
of
dividends,
the
other
within
eight
months
after
the
recording
date
concerning
such
payment
of
dividends)
to
the
Japanese
tax
authority.
To
claim
this
reduced
rate
or
exemption,
any
relevant
non-resident
Holder of
ADSs
will
be
required
to
108
file
proof
of
taxpayer
status,
residence
and
beneficial
ownership
(as
applicable)
and
to
provide
other
information
or
documents
as
may
be
required
by
the
Depositary.
A
non-resident
Holder
who
is
entitled,
under
an
applicable
income
tax
treaty,
to
a
reduced
treaty
rate
lower
than
the
withholding
tax
rate
otherwise
applicable
under
Japanese
tax
law
or
an
exemption
from
the
withholding
tax,
but
fails
to
submit
the
required
application
in
advance,
will
be
entitled
to
claim
the
refund
of
Japanese
taxes
withheld
in
excess
of
the
rate
under
an
applicable
tax
treaty
(if
such
non-resident
Holder
is
entitled
to
a
reduced
treaty
rate
under
the
applicable
income
tax
treaty)
or
the
entire
amount
of
Japanese
tax
withheld
(if
such
non-resident
Holder
is
entitled
to
an
exemption
under
the
applicable
income
tax
treaty)
by
complying
with
a
certain
subsequent
filing
procedure.
Toyota
does
not
assume
any
responsibility
to
ensure
withholding
at
the
reduced
rate,
or
exemption
therefrom,
for
non-resident
Holders
who
would
be
so
eligible
under
an
applicable
tax
treaty,
but
where
the
required
procedures
as
stated
above
are
not followed.
Gains
derived
from
the
sale
of
shares
of
common
stock
or
ADSs
outside
Japan
by
a
non-resident
Holder
holding
such
shares
of
common
stock
or
ADSs
as
portfolio
investors
are,
in
general,
not
subject
to
Japanese
income
tax
or
corporation
tax
under
Japanese
law.
In
addition,
Eligible
U.S.
Holders
are
exempt
from
Japanese
income
or
corporation
tax
with
respect
to
such
gains
under
the
Treaty
so
long
as
filings
required
under
Japanese
law are made.
Japanese
inheritance
and
gift
taxes
at
progressive
rates
may
be
payable
by
an
individual
who
has
acquired
from
another
individual
shares
of
common
stock
or
ADSs
as
a
legatee,
heir
or
donee,
even
though
neither
the
individual, nor the deceased, nor donor is
a Japanese resident.
Holders
of
shares
of
common
stock
or
ADSs
should
consult
their
tax
advisors
regarding
the
effect
of
these
taxes
and,
in
the
case
of
U.S.
Holders,
the
possible
application
of
the
Estate
and
Gift
Tax
Treaty
between
the
United States and Japan.
U.S.
Federal
Income
Taxation
U.S.
Holders
The
following
discussion
is
a
summary
of
the
principal
U.S.
federal
income
tax
consequences
to
U.S.
Holders that hold shares of common stock
or ADSs as capital assets (generally,
for investment purposes).
Taxation
of
Dividends
Subject to
the passive
foreign investment
company
(“PFIC”) rules
discussed
below, the
gross amount
of any
distribution
made
by
Toyota
in
respect
of
shares
of
common
stock
or
ADSs
(without
reduction
for
Japanese
withholding
taxes)
will
constitute
a
taxable
dividend
to
the
extent
paid
out
of
current
or
accumulated
earnings
and
profits,
as
determined
under
U.S.
federal
income
tax
principles.
The
U.S.
dollar
amount
of
such
a
dividend
generally
will
be
included
in
the
gross
income
of
a
U.S.
Holder,
as
ordinary
income,
when
actually
or
constructively
received
by
the
U.S.
Holder,
in
the
case
of
shares
of
common
stock,
or
by
the
Depositary,
in
the
case
of
ADSs.
Dividends
paid
by
Toyota
will
not
be
eligible
for
the
dividends-received
deduction
generally
allowed to U.S. corporations in respect of
dividends received from other
U.S. corporations.
Dividends received on
shares and ADSs of
certain foreign
corporations by non-corporate U.S. investors
may
be
subject
to
U.S.
federal
income
tax
at
lower
rates
than
other
types
of
ordinary
income
if
certain
conditions
are
met.
Dividends
received
by
non-corporate
U.S.
Holders
with
respect
to
shares
of
common
stock
or
ADSs
of
Toyota
are
expected
to
be
eligible
for
these
reduced
rates
of
tax.
U.S.
Holders
should
consult
their
own
tax
advisors regarding the eligibility
of such dividends for a reduced
rate of tax.
The
U.S.
dollar
amount
of
a
dividend
paid
in
Japanese
yen
will
be
determined
based
on
the
Japanese
yen/
U.S.
dollar
exchange
rate
in
effect
on
the
date
that
the
dividend
is
included
in
the
gross
income
of
the
U.S.
Holder,
regardless
of
whether
the
payment
is
converted
into
U.S. dollars
on
that
date.
Generally,
any
gain
or
loss
109
resulting
from
currency
exchange
fluctuations
during
the
period
from
the
date
the
dividend
payment
is
included
in
the
gross
income
of
a
U.S.
Holder
through
the
date
that
payment
is
converted
into
U.S.
dollars
(or
otherwise
disposed
of)
will
be
treated
as
U.S.-source
ordinary
income
or
loss.
U.S.
Holders
should
consult
their
own
tax
advisors regarding the calculation
and U.S. federal income tax treatment
of foreign currency gain
or loss.
To
the
extent,
if
any,
that
the
amount
of
any
distribution
received
by
a
U.S.
Holder
in
respect
of
shares
of
common
stock
or
ADSs
exceeds
Toyota’s
current
and
accumulated
earnings
and
profits,
as
determined
under
U.S. federal
income
tax
principles,
the
distribution
first
will
be
treated
as
a
tax-free
return
of
capital
to
the
extent
of
the
U.S.
Holder’s
adjusted
tax
basis
in
those
shares
or
ADSs,
and
thereafter
will
be
treated
as
U.S.-source
capital gain.
Distributions
of
additional
shares
of
common
stock
that
are
made
to
U.S.
Holders
with
respect
to
their
shares
of
common
stock
or
ADSs,
and
that
are
part
of
a
pro
rata
distribution
to
all
of
Toyota’s
shareholders,
generally will not be subject to U.S. federal
income tax.
For
U.S.
foreign
tax
credit
purposes,
dividends
included
in
gross
income
by
a
U.S.
Holder
in
respect
of
shares
of
common
stock
or
ADSs
will
constitute
income
from
sources
outside
the
United
States,
and
will
generally
be
“passive
category
income”
or,
in
the
case
of
certain
U.S.
Holders,
“general
category
income.”
Any
Japanese
withholding
tax
imposed
in
respect
of
a
Toyota
dividend
may
be
claimed
as
a
credit
against
the
U.S.
federal
income
tax
liability
of
a
U.S.
Holder,
subject
to
a
number
of
complex
limitations
and
conditions,
including
those
introduced
by
recently
issued
U.S.
Treasury
regulations
that
apply
to
foreign
income
taxes
paid
or
accrued
in
taxable
years
beginning
on
or
after
December
28, 2021.
A
U.S.
Holder’s
use
of a
foreign
tax
credit
with
respect
to
any
such
Japanese
income
or
withholding
taxes
would
generally
not
be
allowed
unless
such
U.S.
Holder
elects
benefits
under
an
applicable
income
tax
treaty
with
respect
to
such
tax.
A
U.S.
Holder
who
does
not
elect
to
claim
a
credit
for
any
creditable
foreign
income
taxes
paid
during
the
taxable
year
may
instead
claim
a
deduction
in
the
computation
of
such
U.S.
Holder’s
taxable
income.
Special
rules
generally
will
apply
to
the
calculation
of
foreign
tax
credits
in
respect
of
dividend
income
that
qualifies
for
preferential
U.S. federal
income
tax
rates.
Additionally,
special
rules
apply
to
individuals
whose
foreign
source
income
during
the
taxable
year
consists
entirely
of
“qualified
passive
income”
and
whose
creditable
foreign
taxes
paid
or
accrued
during
the
taxable
year
do
not
exceed
$300
($600
in
the
case
of
a
joint
return).
Further,
under
some
circumstances,
a
U.S.
Holder that:
(i) has held shares of common stock
or ADSs for less than a specified minimum
period; or
(ii) is obligated to make payments
related to Toyota dividends,
will not be allowed a foreign tax credit
for Japanese taxes imposed
on Toyota dividends.
U.S.
Holders
are
urged
to
consult
their
tax
advisors
regarding
the
availability
of
the
foreign
tax
credit
under
their particular circumstances.
Taxation
of
Capital
Gains
and
Losses
In
general,
upon
a
sale
or
other
taxable
disposition
of
shares
of
common
stock
or
ADSs,
a
U.S.
Holder
will
recognize
gain
or
loss
for
U.S.
federal
income
tax
purposes
in
an
amount
equal
to
the
difference
between
the
amount
realized
on
the
sale
or
other
taxable
disposition
and
the
U.S.
Holder’s
adjusted
tax
basis
in
those
shares
of
common
stock
or
ADSs.
A
U.S.
Holder
generally
will
have
an
adjusted
tax
basis
in
a
share
of
common
stock
or an
ADS
equal
to
its
U.S. dollar
cost.
Subject
to the
PFIC
rules discussed
below,
gain
or loss
recognized
on
the
sale
or
other
taxable
disposition
of
shares
of
common
stock
or
ADSs
generally
will
be capital
gain
or
loss
and,
if
the
U.S.
Holder’s
holding
period
for
those
shares
or
ADSs
exceeds
one
year,
will
be
long-term
capital
gain
or
loss.
Non-corporate
U.S.
Holders,
including
individuals,
currently
are
eligible
for
preferential
rates
of
U.S.
federal
income
tax
in
respect
of
long-term
capital
gains.
Under
U.S.
federal
income
tax
law,
the
deduction
of
capital losses is
subject to
limitations. Any
gain or loss recognized
by a U.S. Holder
in respect of the sale
or other
disposition
of
shares
of
common
stock
or
ADSs
generally
will
be
treated
as
U.S.-source
income
or
loss
for
U.S.
foreign tax credit purposes.
110
Deposits
and
withdrawals
of
common
stock
in
exchange
for
ADSs
will
not
result
in
the
realization
of
gain
or loss for U.S. federal income tax
purposes.
Passive
Foreign
Investment
Companies
A
non-U.S.
corporation
generally
will
be
classified
as
a
PFIC
for
U.S.
federal
income
tax
purposes
in
any
taxable
year
in
which,
after
applying
look-through
rules,
either
(1)
at
least
75%
of
its
gross
income
is
passive
income
or (2)
on
average
at
least
50%
of
the
gross
value of
its
assets
is
attributable
to assets
that
produce
passive
income
or
are
held
for
the
production
of
passive
income.
Passive
income
for
this
purpose
generally
includes
dividends,
interest,
royalties,
rents
and
gains
from
commodities
and
securities
transactions.
The
PFIC
determination
is
made
annually
and
generally
is
based
on
the
value
of
a
non-U.S.
corporation’s
assets
(including
goodwill) and composition of its income.
Toyota
does
not
believe
that
it
was
a
PFIC
for
U.S.
federal
income
tax
purposes
for
its
taxable
year
ended
March
31,
2022,
and
currently
intends
to
continue
its
operations
in
such
a
manner
that
it
will
not
become
a
PFIC
in
the
future.
Because
the
PFIC
determination
is
made
annually
and
the
application
of
the
PFIC
rules
to
a
corporation
such
as
Toyota
(which
among
other
things
is
engaged
in
leasing
and
financing
through
several
subsidiaries)
is
not
entirely
clear,
no
assurances
can
be
made
regarding
determination
of
its
PFIC
status
in
the
current
or
any
future
taxable
year.
If
Toyota
is
determined
to
be
a
PFIC,
U.S.
Holders
could
be
subject
to
additional U.S.
federal income
taxes
on gain recognized
with
respect to
the shares
of common stock
or ADSs and
on
certain
distributions.
In
addition,
an
interest
charge
may
apply
to
the
portion
of
the
U.S.
federal
income
tax
liability
on
such
gains
or
distributions
treated
under
the
PFIC
rules
as
having
been
deferred
by
the
U.S.
Holder.
Moreover,
dividends
that
a
non-corporate
U.S.
Holder
receives
from
Toyota
will
not
be
eligible
for
the
reduced
U.S.
federal
income
tax
rates
on
dividends
described
above
if
Toyota
is
a
PFIC
either
in
the
taxable
year
of
the
dividend
or
the
preceding
taxable
year.
If
a
U.S.
Holder
owns
shares
of
common
stock
or
ADSs
in
any
taxable
year
in
which
Toyota
is
a
PFIC,
such
U.S.
Holder
generally
would
be
required
to
file
Internal
Revenue
Service
(“IRS”)
Form
8621
(or
other
form
specified
by
the
U.S.
Department
of
the
Treasury)
on
an
annual
basis,
subject
to
certain
exceptions
based
on
the
value
of
PFIC stock
held.
Toyota
will
inform
U.S.
Holders
if
it
believes
that
it
will be classified as a PFIC in any taxable
year.
Prospective
investors
should
consult
their
own
tax
advisors
regarding
the
potential
application
of
the
PFIC
rules to shares of common stock or
ADSs.
Non-U.S.
Holders
The
following
discussion
is
a
summary
of
the
principal
U.S.
federal
income
tax
consequences
to
beneficial
owners of shares
of common stock
or ADSs that are neither U.S. Holders, nor partnerships,
nor entities taxable
as
partnerships for U.S. federal income
tax purposes (“Non-U.S. Holders”).
A
Non-U.S.
Holder
generally
will
not
be
subject
to
any
U.S.
federal
income
or
withholding
tax
on
distributions
received
in
respect
of
shares
of
common
stock
or
ADSs
unless
the
distributions
are
effectively
connected
with
the
conduct
by
the
Non-U.S.
Holder
of
a
trade
or
business
within
the
United
States
(and,
if
an
applicable
tax
treaty
requires,
are
attributable
to
a
U.S.
permanent
establishment
or
fixed
base
of
such
Non-U.S.
Holder).
A Non-U.S.
Holder
generally
will
not
be
subject
to
U.S. federal
income
tax
in
respect of
gain
recognized
on
a sale or other disposition of
shares of common stock or ADSs, unless:
(i)
the
gain
is
effectively
connected
with
a
trade
or
business
conducted
by
the
Non-U.S.
Holder
within
the
United
States
(and,
if
an
applicable
tax
treaty
requires,
is
attributable
to
a
U.S.
permanent establishment or
fixed base of such Non-U.S. Holder); or
(ii)
the Non-U.S. Holder
is an
individual who was
present in the
United States for
183 or more
days in
the taxable year of the disposition
and other conditions are met.
111
Income
that
is
effectively
connected
with
a
U.S.
trade
or
business
of
a
Non-U.S.
Holder,
and,
if
an
income
tax
treaty
applies
and
so
requires,
is
attributable
to a
U.S.
permanent
establishment
or
fixed
base
of
the
Non-U.S.
Holder,
generally
will
be
taxed
in
the
same
manner
as
the
income
of
a
U.S.
Holder.
In
addition,
under
certain
circumstances,
any
effectively
connected
earnings
and
profits
realized
by
a
corporate
Non-U.S.
Holder
may
be
subject
to
an
additional
“branch
profits
tax”
at
the
rate
of
30%
or
at
a
lower
rate
that
may
be
prescribed
by
an
applicable income tax treaty.
Backup
Withholding
and
Information
Reporting
In
general,
information
reporting
requirements
will
apply
to
dividends
paid
to
a
U.S.
Holder
in
respect
of
shares
of
common
stock
or
ADSs,
and
to
the
proceeds
received
upon
the
sale,
exchange
or
redemption
of
the
shares
of
common
stock
or
ADSs
within
the
United
States
by
U.S.
Holders.
Furthermore,
backup
withholding
may
apply
to
those
amounts
(currently
at
a
24%
rate)
if
a
U.S.
Holder
fails
to
provide
an
accurate
taxpayer
identification
number
to
certify
that
such
U.S.
Holder
is
not
subject
to
backup
withholding
or
to
otherwise
comply with the applicable requirements
of the backup withholding requirements.
Dividends
paid
to
a
Non-U.S.
Holder
in
respect
of
shares
of common
stock
or
ADSs,
and
proceeds
received
upon
the
sale,
exchange
or
redemption
of
shares
of
common
stock
or
ADSs
by
a
Non-U.S.
Holder,
generally
are
exempt from
information
reporting
and backup
withholding under
current
U.S. federal
income tax
law. However,
a Non-U.S. Holder may be required to provide certification
of non-U.S. status in order
to obtain that exemption.
Persons
required
to
establish
their
exempt
status
generally
must
provide
such
certification
under
penalty
of
perjury
on
IRS
Form
W-9,
entitled
Request
for
Taxpayer
Identification
Number
and
Certification,
in
the
case
of
U.S.
persons,
and
on
IRS
Form
W-8BEN,
entitled
Certificate
of
Foreign
Status
of
Beneficial
Owner
for
United
States
Tax
Withholding
and
Reporting
(Individuals),
or
IRS
Form
W-8BEN-E,
entitled
Certificate
of
Status
of
Beneficial
Owner
for
United
States
Tax
Withholding
and
Reporting
(Entities)
(or
other
appropriate
IRS
Form
W-8),
in
the
case
of
non-U.S.
persons.
Backup
withholding
is
not
an
additional
tax.
The
amount
of
backup
withholding imposed
on
a payment
generally
may
be
claimed as
a
credit against
the holder’s
U.S. federal
income
tax liability, provided that
the required information is
properly furnished to the IRS in a timely
manner.
In
addition,
certain
U.S.
Holders
who
are
individuals
that
hold
certain
foreign
financial
assets
(which
may
include
shares
of
common
stock
or
ADSs)
are
required
to
report
information
relating
to
such
assets,
subject
to
certain
exceptions.
U.S.
Holders
should
consult
their
tax
advisors
regarding
the
effect,
if
any,
of
this
legislation
on their ownership and disposition of shares
of common stock or ADSs.
THE
SUMMARY
OF
U.S.
FEDERAL
INCOME
AND
JAPANESE
NATIONAL
TAX
CONSEQUENCES
SET
OUT
ABOVE
IS
INTENDED
FOR
GENERAL
INFORMATION
PURPOSES
ONLY.
PROSPECTIVE
PURCHASERS
OF
COMMON
STOCK
OR
ADSs
ARE
URGED
TO
CONSULT
WITH
THEIR
OWN
TAX
ADVISORS WITH
RESPECT
TO
THE PARTICULAR
TAX
CONSEQUENCES TO
THEM
OF
OWNING OR
DISPOSING OF COMMON STOCK OR
ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.
10.F
DIVIDENDS
AND
PAYING
AGENTS
Not applicable.
10.G
STATEMENT
BY
EXPERTS
Not applicable.
10.H
DOCUMENTS
ON
DISPLAY
Toyota
files
annual
reports
on
Form
20-F
and
reports
on
Form
6-K
with
the
SEC.
You
may
access
this
information
through
the
SEC’s
website
(https://www.sec.gov).
In
addition,
Toyota’s
reports,
proxy
statements
112
and
other
information
may
be
inspected
at
the
offices
of
the
New
York
Stock
Exchange,
20
Broad
Street,
New
York, New
York
10005.
Copies
of
the
documents
referred
to
herein
may
also
be
inspected
at
Toyota’s
offices
by
contacting
Toyota
at
1
Toyota-cho,
Toyota
City,
Aichi
Prefecture
471-8571,
Japan,
attention:
Capital
Strategy
&
Affiliated Companies, Finance Division,
telephone number: +81-565-28-2121.
10.I
SUBSIDIARY
INFORMATION
Not applicable.
ITEM
11.
QUANTITATIVE
AND
QUALITATIVE
DISCLOSURES
ABOUT
MARKET
RISK
Quantitative
and
Qualitative
Disclosures
about
Market
Risk
Toyota
is
exposed
to
market
risk
from
changes
in
foreign
currency
exchange
rates,
interest
rates,
certain
commodity
and
equity
security
prices.
In
order
to
manage
the
risk
arising
from
changes
in
foreign
currency
exchange rates and interest rates,
Toyota enters into a variety
of derivative financial
instruments.
A
description
of
Toyota’s
accounting
policies
for
derivative
instruments
is
included
in
note
3
to
the
consolidated
financial
statements
and
further
disclosure
is
provided
in
notes
20
and
21
to
the
consolidated
financial statements.
Toyota
monitors
and
manages
these
financial
exposures
as
an
integral
part
of
its
overall
risk
management
program,
which
recognizes
the
unpredictability
of
financial
markets,
and
seeks
to
reduce
the
potentially
adverse
effects on Toyota’s operating results.
Market
risk
analyses
of
risks
such
as
foreign
exchange
risk,
interest
rate
risk,
commodity
price
fluctuation
risk and stock price fluctuation
risk are provided in note 19 to the
consolidated financial statements.
ITEM
12.
DESCRIPTION
OF
SECURITIES
OTHER
THAN
EQUITY
SECURITIES
12.A
DEBT
SECURITIES
Not applicable.
12.B
WARRANTS
AND
RIGHTS
Not applicable.
12.C
OTHER
SECURITIES
Not applicable.
12.D
AMERICAN
DEPOSITARY
SHARES
Fees
and
Charges
for
Holders
of
American
Depositary
Shares
The
Bank
of
New
York
Mellon,
as
Depositary
for
the
ADSs,
collects
its
fees
for
delivery
and
surrender
of
ADSs
directly
from
investors
depositing
shares
or
surrendering
ADSs
for
the
purpose
of
withdrawal
or
from
intermediaries
acting
for
them.
The
Depositary
collects
fees
for
making
distributions
to
investors
by
deducting
those
fees
from
the
amounts
distributed
or
by
selling
a
portion
of
distributable
property
to
pay
the
fees.
The
Depositary may generally refuse
to provide fee-attracting
services until its fees
for those services are paid.
113
Persons
depositing
or
withdrawing
shares
must
pay:
For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
Delivery
of
ADSs,
including
those
resulting
from
a
distribution,
sale
or
exercise
of
shares
or
rights or other property
Surrender
of
ADSs
for
the
purpose
of
withdrawal
including
if
the
deposit
agreement
terminates
$0.05 (or less) per ADS
Any cash distribution
to ADS registered holders
A fee equivalent to the fee that
would be payable if
securities distributed
to you had been shares and the
shares had been deposited for delivery
of ADSs
Distribution
of
securities
or
rights
distributed
to
holders of
deposited
securities
that are
distributed
by the Depositary to ADS registered holders
$0.05 (or less) per ADS per year
General depositary
services
Registration fees
Registration
of
transfer
of
shares
on
Toyota’s
share
register
to
or
from
the
name
of
the
Depositary
or
its
nominee
or
the
custodian
or
its
nominee when shares are deposited or withdrawn
Fees and expenses of the Depositary
Cable
(including
SWIFT)
and
facsimile
transmissions
(when
expressly
provided
in
the
deposit agreement)
Converting
foreign currency to U.S. dollars
Taxes and other governmental charges
the Depositary
or the custodian have to pay on any ADS or share
underlying an ADS
As necessary
Any other charges payable by the Depositary, the
custodian or their respective
agents in connection with
the servicing of the deposited securities
As necessary
Fees
Incurred
in
Fiscal
2022
For
fiscal
2022,
the
Depositary
paid
to
Toyota,
or
paid
to
a
third
party
at
Toyota’s
instruction,
an
aggregate
of
$854,666
for
standard
out-of-pocket
maintenance
costs
for
the
ADSs
(consisting
of
the
expenses
of
postage
and
envelopes
for
mailing
annual
reports,
printing
and
distributing
dividend
checks,
stationery,
postage,
facsimile,
and
telephone
calls),
Toyota’s
continuing
annual
stock
exchange
listing
fees
with
respect
to
the
ADSs,
expenses
relating
to
Toyota’s
annual
general
shareholders’
meeting
that
are
incurred
with
respect
to
Toyota’s
ADS holders and 50% of the net dividend fees collected
by the Depositary.
Fees
to
be
Paid
in
the
Future
With
regards
to the
ADS
program,
the
Depositary
has agreed
to
pay
the standard
out-of-pocket
maintenance
costs
for
the
ADSs,
which
includes
the
expenses
of
postage
and
envelopes
for
mailing
annual
reports,
printing
and
distributing
dividend
checks,
stationery,
postage,
facsimile
and
telephone
calls.
It
has
also
agreed
to
pay
for
investor
relations
expenses,
the
continuing
annual
stock
exchange
listing
fees
with
respect
to
the
ADSs,
and
any
other
program
related
expenses.
The
limit
on
the
amount
of
expenses
for
which
the
Depositary
will
pay
is
the
sum
of
$300,000
annually.
In
addition,
the
Depositary
has
agreed
to
pay
Toyota
50%
of
the
net
dividend
fees
collected by the Depositary during each
annual period towards the aforementioned
expenses.
114
PART
II
ITEM
13.
DEFAULTS,
DIVIDEND
ARREARAGES
AND
DELINQUENCIES
None.
ITEM
14.
MATERIAL
MODIFICATIONS
TO
THE
RIGHTS
OF
SECURITY
HOLDERS
AND
USE
OF
PROCEEDS
None.
ITEM
15.
CONTROLS
AND
PROCEDURES
(a)
DISCLOSURE
CONTROLS
AND
PROCEDURES
Toyota
performed
an
evaluation
of
the
effectiveness
of
the
design
and
operation
of
its
disclosure
controls
and
procedures
as
of
the
end
of
fiscal
2022.
Disclosure
controls
and
procedures
are
designed
to
ensure
that
information
required
to
be
disclosed
in
the
Form
20-F
that
Toyota
files
under
the
Exchange
Act
is
accumulated
and
communicated
to
its
management,
including
the
chief
executive
officer
and
the
principal
accounting
and
financial
officer,
to
allow
timely
decisions
regarding
required
disclosure.
The
disclosure
controls
and
procedures
also
ensure
that
the
Form
20-F
that
it
files
under
the
Exchange
Act
is
recorded,
processed,
summarized
and
reported
within
the
time
periods
specified
in
the
Commission’s
rules
and
forms.
The
evaluation
was
performed
under
the
supervision
of
Toyota’s
President
and
Representative
Director,
who
concurrently
serves
as
CEO,
and
the
member
of
the
board
of
directors
who
concurrently
serves
as
CFO.
Toyota’s
disclosure
controls
and
procedures
are
designed
to
provide
reasonable
assurance
of
achieving
its
objectives.
Managerial
judgment
was
necessary
to
evaluate
the
cost-benefit
relationship
of
possible
controls
and
procedures.
The
President
and
Representative
Director
as
well
as
the
member
of
the
board
of
directors
have
concluded
that
Toyota’s
disclosure
controls and procedures are effective
at the reasonable assurance
level.
(b)
MANAGEMENT’S
ANNUAL
REPORT
ON
INTERNAL
CONTROL
OVER
FINANCIAL
REPORTING
Toyota’s
management
is
responsible
for
establishing
and
maintaining
effective
internal
control
over
financial reporting.
Internal control
over financial
reporting is
a process designed to provide reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external
purposes
in
accordance
with
IFRS.
Toyota’s
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that:
(i)
pertain
to
the
maintenance
of
records
that
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions and dispositions
of Toyota’s assets;
(ii)
provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
accordance
with
IFRS,
and
that
Toyota’s
receipts
and
expenditures
are
being
made
only
in
accordance
with
authorizations
of
Toyota’s
management
and
members
of
the
board
of
directors; and
(iii)
provide reasonable
assurance
regarding
prevention or
timely
detection of
unauthorized
acquisition, use,
or disposition of Toyota’s assets
that could have a material effect
on the financial statements.
Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements.
Also,
projections
of
any
evaluation
of
effectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that
the
degree
of
compliance
with
the
policies or procedures may deteriorate.
115
Toyota’s
management
conducted
an
evaluation
of
the
effectiveness
of
internal
control
over
financial
reporting
based
on
the
framework
in
“Internal
Control
Integrated
Framework
(2013)”
issued
by
the
Committee of Sponsoring Organizations
of the Treadway Commission.
Based
on
this
evaluation,
management
concluded
that
Toyota’s
internal
control
over
financial
reporting
was
effective as of March 31, 2022.
PricewaterhouseCoopers
Aarata
LLC,
an
independent
registered
public
accounting
firm
that
audited
the
consolidated
financial
statements
included
in
this
report,
has
also
audited
the
effectiveness
of
Toyota’s
internal
control over financial reporting
as of March 31, 2022, as stated in its
report included herein.
(c)
ATTESTATION
REPORT
OF
THE
REGISTERED
PUBLIC
ACCOUNTING
FIRM
Toyota’s independent registered
public accounting
firm, PricewaterhouseCoopers Aarata
LLC, has issued an
audit
report
on
the
effectiveness
of
Toyota’s
internal
control
over
financial
reporting.
This
report
appears
in
Item 18.
(d)
CHANGES
IN
INTERNAL
CONTROL
OVER
FINANCIAL
REPORTING
There
have
been
no
changes
in
Toyota’s
internal
control
over
financial
reporting
during
fiscal
2022
that
have
materially
affected,
or
are
reasonably
likely
to
materially
affect,
Toyota’s
internal
control
over
financial
reporting.
ITEM
16.
[RESERVED]
ITEM
16A.
AUDIT
COMMITTEE
FINANCIAL
EXPERT
Toyota
maintains
an
audit
&
supervisory
board
system,
in
accordance
with
the
Companies
Act.
Toyota’s
audit
&
supervisory
board
is
comprised
of
six
audit
&
supervisory
board
members,
three
of
whom
are
outside
audit
&
supervisory
board
members.
Each
audit
&
supervisory
board
member
has
been
appointed
at
Toyota’s
meetings
of
shareholders
and
has
certain
statutory
powers
independently,
including
auditing
the
business
affairs
and accounts of Toyota.
Toyota’s
audit
&
supervisory
board
has
determined
that
it
does
not
have
an
“audit
committee
financial
expert”
serving
on
the
audit
&
supervisory
board.
The
qualifications
for,
and
powers
of,
the
audit
&
supervisory
board
member
delineated
in
the
Companies
Act
are
different
from
those
anticipated
for
any
audit
committee
financial
expert.
Audit
&
supervisory
board
members
have
the
authority
to
be
given
reports
from
a
certified
public
accountant
or
an
accounting
firm
concerning
audits,
including
technical
accounting
matters.
At
the
same
time,
each
audit
&
supervisory
board
member
has
the
authority
to
consult
internal
and
external
experts
on
accounting
matters.
Each
audit
&
supervisory
board
member
must
fulfill
the
requirements
under
Japanese
laws
and
regulations
and
otherwise
follow
Japanese
corporate
governance
practices
and,
accordingly,
Toyota’s
audit &
supervisory board
has confirmed
that
it is
not necessarily
in Toyota’s
best interest
to nominate as
audit &
supervisory
board
member
a
person
who
meets
the
definition
of
audit
committee
financial
expert.
Although
Toyota
does
not
have
an
audit
committee
financial
expert
on
its
audit
&
supervisory
board,
Toyota
believes
that
Toyota’s
current
corporate
governance
system,
taken
as
a
whole,
including
the
audit
&
supervisory
board
members’
ability
to
consult
internal
and
external
experts,
is
fully
equivalent
to
a
system
having
an
audit
committee financial expert
on its audit & supervisory
board.
ITEM
16B.
CODE
OF
ETHICS
Toyota
has
adopted
a
code
of
ethics
that
applies
to
its
members
of
the
board
of
directors
and
operating
officers,
including
its
principal
executive
officer,
principal
financial
officer,
principal
accounting
officer
or
controller,
or persons
performing similar
functions.
A copy
of Toyota’s
code of
ethics
is included
as an
exhibit to
this annual report on Form 20-F.
116
ITEM
16C.
PRINCIPAL
ACCOUNTANT
FEES
AND
SERVICES
PricewaterhouseCoopers
Aarata
LLC
has
audited
the
financial
statements
of
Toyota
included
in
this
annual
report on Form 20-F.
The
following
table
presents
the
aggregate
fees
for
professional
services
and
other
services
rendered
by
PricewaterhouseCoopers
Aarata
LLC
and
the
various
network
and
member
firms
of
PricewaterhouseCoopers
to
Toyota in fiscal 2021 and fiscal 2022.
Yen
in
millions
2021
2022
Audit Fees
(1)
................................................................
4,602
5,460
Audit-related Fees
(2)
..........................................................
7
0
5
2
Tax Fees
(3)
.................................................................
3
7
3
3
5
1
All Other Fees
(4)
.............................................................
1
8
5
1
8
1
Total
.....................................................................
5,230
6,045
(1)
Audit
Fees
consist
of
fees
billed
for
the
annual
audit
services
engagement
and
other
audit
services,
which
are
those
services
that
only
the
external
auditor
reasonably
can
provide,
and
include
the
services
of
annual
audit,
quarterly
reviews
and
assessment
and
reviews
of
the
effectiveness
of
internal
controls
over
financial
reporting
of
Toyota
and
its
subsidiaries
and
affiliated
companies;
the
services
associated
with
SEC
registration
statements
or
other
documents
issued
in
connection
with
securities
offerings
such
as
comfort
letters and consents; and consultations
as to the accounting or disclosure
treatment of transactions
or events.
(2)
Audit-related
Fees
consist
of
fees
billed
for
assurance
and
related
services
that
are
reasonably
related
to
the
performance
of
the
audit
or
review
of
its
financial
statements
or
that
are
traditionally
performed
by
the
external
auditor,
and
mainly
include
services
such
as
agreed-upon
or
expanded
audit
procedures;
and
financial statement audits
of employee benefit plans.
(3)
Tax
Fees include
fees billed
for tax
compliance
services, including
services
such as
tax planning, advice
and
compliance
of
federal,
state,
local
and
international
tax;
the
review
of
tax
returns;
assistance
with
tax
audits
and appeals; tax-only valuation services
including transfer
pricing; expatriate tax assistance
and compliance.
(4)
All
Other
Fees
primarily
include
fees
billed
for
risk
management
advisory
services;
services
providing
information related to automotive
market conditions;
and other advisory services.
Policies
and
Procedures
of
the
Audit
&
Supervisory
Board
Below
is
a
summary
of
the
current
policies
and
procedures
of
the
audit
&
supervisory
board
for
the
pre-approval of audit and permissible
non-audit services performed
by Toyota’s independent public
accountants.
Under the policy, specified
operating
officers or managers
submit a
request for
general pre-approval
of audit
and
permissible
non-audit
services
for
the
following
fiscal
year,
which
shall
include
details
of
the
specific
services
and
estimated
fees
for
the
services,
to
the
audit
&
supervisory
board,
which
reviews
and
determines
whether
or
not
to
grant
the
request
in
advance.
Upon
the
general
pre-approval
of
the
audit
&
supervisory
board,
the
specified
operating
officers
or
managers
are
not
required
to
obtain
any
specific
pre-approval
for
audit
and
permissible
non-audit
services
so
long
as
those
services
fall
within
the
scope
of
the
general
pre-approval
provided.
The
audit
&
supervisory
board
makes
a
further
determination
of
whether
or
not
to
grant
a
request
to
revise
the
general
pre-approval
for
the
applicable
fiscal
year
if
such
request
is
submitted
by
specified
operating
officers
or
managers.
Such
request
may
include
(i)
adding
any
audit
or
permissible
non-audit
services
other
than
the
ones
listed
in
the
general
pre-approval
and
(ii)
obtaining
services
that
are
listed
in
the
general
pre-approval
but
of
117
which
the
total
fee
amount
exceeds
the
amount
affirmed
by
the
general
pre-approval.
The
determination
of
whether
or
not
to
grant
a
request
to
revise
the
general
pre-approval
noted
in
the
foregoing
may
alternatively
be
made
by
an
audit
&
supervisory
board
member
(full
time),
who
is
designated
in
advance
by
a
resolution
of
the
audit
&
supervisory
board,
in
which
case
such
audit
&
supervisory
board
member
(full
time)
shall
report
such
decision
at
the
next
meeting
of
the
audit
&
supervisory
board.
The
performance
of
audit
and
permissible
non-audit
services
and
the
payment
of
fees
are
subject
to
review
by
the
audit
&
supervisory
board
at
least
once
every fiscal half year.
None
of
the
audit
related
fees,
tax
fees
or
all
other
fees
described
in
the
table
above
were
approved
by
the
audit
&
supervisory
board
pursuant
to
the
de
minimis
exception
provided
by
paragraph
(c)(7)(i)(C)
of
Rule
2-01
of Regulation S-X.
ITEM
16D.
EXEMPTIONS
FROM
THE
LISTING
STANDARDS
FOR
AUDIT
COMMITTEES
Toyota
does
not
have
an
audit
committee.
Toyota
is
relying
on
the
general
exemption
contained
in
Rule
10A-3(c)(3)
under
the
Exchange
Act,
which
provides
an
exemption
from
the
NYSE’s
listing
standards
relating
to
audit
committees
for
foreign
companies
like
Toyota
that
have
an
audit
&
supervisory
board.
Toyota’s
reliance
on
Rule
10A-3(c)(3)
does
not,
in
its
opinion,
materially
adversely
affect
the
ability
of
its
audit
&
supervisory board to act independently
and to satisfy the other requirements
of Rule 10A-3.
ITEM
16E.
PURCHASES
OF
EQUITY
SECURITIES
BY
THE
ISSUER
AND
AFFILIATED
PURCHASERS
The
following
table
sets
forth
purchases
of
Toyota’s
common
stock
by
Toyota
and
its
affiliated
purchasers
during fiscal 2022:
Period
(a)
Total
Number
of
Shares
Purchased
(1)(2)
(b)
Average
Price
Paid
per
Share
(Yen)
(1)(2)
(c)
Total
Number
of
Shares
Purchased
as
Part
of
Publicly
Announced
Plans
or
Programs
(1)(3)
(d)
Maximum
Number
of
Shares
that
May
Yet
Be
Purchased
Under
the
Plans
or
Programs
(1)(3)
April 1, 2021 – April 30, 2021
......................
6,480
8,442.05
May 1, 2021 – May 31, 2021
.......................
6,285
8,482.47
June 1, 2021 – June 30, 2021
.......................
11,025,155
9,785.95
11,008,000
July 1, 2021 – July 31, 2021
........................
36,347,425
9,721.70
36,342,000
August 1, 2021 – August 31, 2021
...................
64,503,960
9,620.58
64,498,500
September 1, 2021 – September 30, 2021
..............
17,367,305
9,704.57
17,358,500
October 1, 2021 – October 31, 2021
..................
2,470
1,965.89
November 1, 2021 – November 30, 2021
..............
11,911,575
2,096.99
11,910,000
December 1, 2021 – December 31, 2021
..............
20,121,741
2,063.71
20,120,000
January 1, 2022 – January 31, 2022
..................
12,157,620
2,304.53
12,156,400
February 1, 2022 – February 28, 2022
................
15,174,545
2,213.82
15,173,600
March 1, 2022 – March 31, 2022
....................
13,107,195
2,022.19
13,106,500
Total
..........................................
201,731,756
201,673,500
(1)
Toyota
effected
a
five-for-one
stock
split
of
shares
of
its
common
stock
with
a record
date
of
September
30,
2021
and
an
effective
date
of
October
1,
2021.
The
above
numbers
for
the
period
from
April
1,
2021
through September
30,
2021 are
calculated
based
on the
assumption
that
the
stock split
was implemented
on
April 1, 2021.
118
(2)
A
portion
of
the
above
purchases
were
made
as
a
result
of
holders
of
shares
constituting
less
than
one
unit,
which
is
100
shares
of
common
stock,
requesting
Toyota
to
purchase
shares
that
are
a
fraction
of
a
unit,
in
accordance
with
Toyota’s
share
handling
regulations.
Toyota
is
required
to
comply
with
such
requests
pursuant
to
the
Companies
Act.
See
“Additional
Information
Memorandum
and
Articles
of
Association
— Japanese
Unit
Share
System.”
The
number
of
shares
purchased
not
pursuant
to publicly
announced plans
or
programs
conducted
in
fiscal
2022
is
57,561
(calculated
based
on
the
assumption
that
the
stock
split
was
implemented on April 1, 2021).
(3)
Toyota
announced
on
May
12,
2021
that
it
would
repurchase
up
to
41
million
shares
(205
million
shares
after
considering
stock
split)
of
its
common
stock
between
June
18,
2021
to
September
30,
2021
at
a
total
maximum
purchase
price
of
250
billion
yen,
in
order
to
return
to
shareholders
the
profits
derived
in
fiscal
2021.
Toyota
also
announced
on
November
4,
2021
that
it
would
repurchase
up
to
120
million
shares
of
its
common
stock
between
November
5,
2021
to
March
31,
2022
at
a
total
maximum
purchase
price
of
150
billion
yen
in
order
to
return
to
shareholders
the
profits
derived
in
the
first
half
of
fiscal
2022.
Toyota
further
announced
on
March
23,
2022
that
it
would
repurchase
up
to
80
million
shares
of
its
common
stock
between
March
24,
2022
to
May
10,
2022
at
a
total
maximum
purchase
price
of
100
billion
yen
to
provide
more flexibility with respect
to repurchases than in the past.
ITEM
16F.
CHANGE
IN
REGISTRANT’S
CERTIFYING
ACCOUNTANT
Not applicable.
ITEM
16G.
CORPORATE
GOVERNANCE
Significant
Differences
in
Corporate
Governance
Practices
between
Toyota
and
U.S.
Companies
Listed
on
the
NYSE
Pursuant
to
home
country
practices
exemptions
granted
by
the
NYSE,
Toyota
is
permitted
to
follow
certain
corporate governance
practices
complying with Japanese
laws, regulations
and stock exchange
rules in lieu
of the
NYSE’s
listing
standards.
The
SEC
approved
changes
to
the
NYSE’s
listing
standards
related
to
corporate
governance
practices
of
listed
companies
(the
“NYSE
Corporate
Governance
Rules”)
in
November
2003,
as
further
amended
in
November
2004.
Toyota
is
exempt
from
the
approved
changes,
except
for
requirements
that
(a)
Toyota’s
audit
&
supervisory
board
satisfies
the
requirements
of
Rule
10A-3
under
the
Securities
Exchange
Act
of
1934,
as
amended
(the
“Exchange
Act”),
(b)
Toyota
must
disclose
significant
differences
in
its
corporate
governance
practices
as
compared
to
those
followed
by
domestic
companies
under
the
NYSE
listing
standards,
(c)
Toyota’s
principal
executive
officer
must
notify
the
NYSE
in
writing
after
any
executive
officer
of
Toyota
becomes
aware
of
any
non-compliance
with
(a)
and
(b),
and
(d)
Toyota
must
submit
annual
and
interim
written
affirmations
to
the
NYSE.
Toyota’s
corporate
governance
practices
and
those
followed
by
domestic
companies
under the NYSE Corporate Governance Rules have the following significant
differences:
1.
Members
of
the
Board
of
Directors.
Toyota
currently
does
not
have
any
members
of
the
board
of
directors
who
will
be
deemed
an
“independent
director”
as
required
under
the
NYSE
Corporate
Governance
Rules
for
U.S.
listed
companies.
Unlike
the
NYSE
Corporate
Governance
Rules,
the
Companies
Act
does
not
require
Japanese
companies
with
an
audit
&
supervisory
board
such
as
Toyota
to
have
any
independent
directors
on
its
board
of
directors.
While
the
NYSE
Corporate
Governance
Rules
require
that
the
non-management
directors
of
each
listed
company
meet
at
regularly
scheduled
executive
sessions
without
management,
Toyota
currently
has
no
non-management
member
on
its
board
of
directors.
Unlike
the
NYSE
Corporate
Governance
Rules, the
Companies
Act
does not
require,
and
accordingly
Toyota does
not
have, an
internal
corporate
organ
or
committee comprised solely
of independent directors.
119
The Companies
Act requires Toyota
to have outside
members of
the board of directors
under the
Companies
Act.
Toyota
currently
has
three
outside
members
of
the
board
of
directors.
An
“outside”
member
of
the
board
of
directors refers to:
(a)
a
person
who
is
not,
and
has
never
been
during
the
ten
year
period
before
becoming
an
outside
member
of
the
board
of
directors,
an
executive
director
(a
member
of
the board
of
directors
who
engages
in
the
execution
of
business),
executive
officer,
manager
or
employee
(collectively,
“Executive
Director,
etc.”)
of
Toyota
or
its
subsidiaries;
(b)
if
a
person
was
a
member
of
the
board
of
directors,
accounting
counselor
(in
the case
that
an
accounting
counselor
is
a
legal
entity,
an
employee
of
such
entity
who
is
in
charge
of
its
affairs)
or
audit
&
supervisory
board
member
(excluding
those
who
have
ever
been
Executive
Directors,
etc.)
of
Toyota
or
any
of
its
subsidiaries
at
any
time
during
the
ten
year
period
before
becoming
an
outside
member
of
the
board
of directors,
such
person
who
has
not
been
an
Executive
Director,
etc.
of
Toyota
or
any
of
its
subsidiaries
during
the
ten
year
period
before
becoming
a
member
of
the
board
of
directors,
accounting
counselor
or
audit
&
supervisory
board
member; and
(c)
a
person
who
is
not
a
spouse
or
relative
within
the
second
degree
of
kinship
of
any
member
of
the
board
of directors or manager or other
key employee of Toyota.
Such
qualifications
for
an
“outside”
member
of
the
board
of
directors
are
different
from
the
director
independence requirements under the
NYSE Corporate Governance Rules.
In
addition,
pursuant
to
the
regulations
of
the
Japanese
stock
exchanges,
Toyota
is
required
to
have
one
or
more
“independent
director(s)/audit
&
supervisory
board
member(s),”
defined
under
the
relevant
regulations
of
the
Japanese
stock
exchanges
as
“outside
directors”
or
“outside
audit
&
supervisory
board
members”
(as
defined
under
the
Companies
Act),
who
are
unlikely
to
have
any
conflicts
of
interests
with
Toyota’s
general
shareholders,
and
is
also
required
to
make
efforts
to
have
at
least
one
“independent
director(s)/audit
&
supervisory
board
member(s)”
who
is
also
a
director.
Each
of
the
outside
members
of
the
board
of
directors
of
Toyota
satisfies
the
“independent
director/audit
&
supervisory
board
member”
requirements
under
the
regulations
of
the
Japanese
stock
exchanges.
The
Japanese
Corporate
Governance
Code
provides
that
certain
listed
companies,
including
Toyota,
should
appoint
at
least
one
third
of
their
directors
as
“independent
outside
directors”
as
defined
based
on
the
criteria
for
assessing
director
independence
established
by
Toyota
in
line
with
the
independence
standards
of
the
Japanese
stock
exchanges.
The
content
of
the
criteria
for
assessing
director
independence
established
by
Toyota
is
the
same
as
that
of
the
independence
standards
of
the
Japanese
stock
exchanges,
and
each
of
the
outside
members
of
the
board
of
directors
of
Toyota
satisfies
the
“independent
outside
director”
requirements
under
such
independence
standards.
The
definition
of
“independent
director/
audit
&
supervisory
board
member”
and
“independent
outside
director”
is
different
from
that
of
the
definition
of
independent director under the NYSE Corporate Governance
Rules.
2.
Committees.
Under
the
Companies
Act,
Toyota
has
elected
to
structure
its
corporate
governance
system
as
a
company
with
audit
&
supervisory
board
members
who
are
under
a
statutory
duty
to
monitor,
review
and
report
on
the
management
of
the
affairs
of
Toyota.
Toyota,
as
with
other
Japanese
companies
with
an
audit
&
supervisory
board,
does
not
have
certain
committees
that
are
required
of
U.S.
listed
companies
subject
to
the
NYSE
Corporate
Governance
Rules,
including
those
that
are
responsible
for
director
nomination,
corporate
governance
and
executive
compensation.
However,
members
of
Toyota’s
Executive
Appointment
Meeting,
a
majority
of
whom
are
outside
directors,
discuss
recommendations
to
the
board
of
directors
concerning
the
appointment
and
dismissal
of
members
of
the
board
of directors
and
the
Executive
Appointment Meeting
discuss
the
details
of
the
proposals
to
audit
&
supervisory
board.
Members
of
the
Executive
Compensation
Meeting,
a
majority
of
whom
are
outside
directors,
review
the
remuneration
system
for
members
of
board
of
directors
and
senior
management
as
well
as
determine
the
amount
of
remuneration
for
each
member
of
the
board
of
directors.
The
Japanese
Corporate
Governance
Code
provides
that
certain
listed
companies,
including
Toyota,
generally
should
have
the
majority
of
the
members
of
each
of
certain
committees
be
independent
directors,
and
those
committees of Toyota satisfy
that principle.
120
Pursuant
to
the
Companies
Act,
Toyota’s
board
of
directors
nominates
and
submits
a
proposal
for
the
appointment
of
members
of
the
board
of
directors
for
shareholder
approval.
The
shareholders
vote
on
such
nomination
at
the
general
shareholders’
meeting.
The
Companies
Act
requires
that
the
limits
or
calculation
formula
of
the
remuneration,
bonus
and
any
other
benefits
in
compensation
for
the
execution
of
duties
(“remuneration,
etc.”)
of
directors,
the
kind
of
remuneration,
etc.
(in
case
that
the
remuneration,
etc.
are
other
than
cash
(excluding
shares
and
stock
acquisition
rights))
to
be
received
by
directors,
and
the
limits
of
remuneration,
etc.
that
are
shares
and
stock
acquisition
rights
to
be
granted
to
directors
as
well
as
the
limits
of
remuneration,
etc.
to
be
paid
to
audit
&
supervisory
board
members
must
be
determined
by
a
resolution
of
the
general
shareholders’
meeting,
unless their
remuneration,
etc.
is
provided
for in
the
articles
of incorporation.
The
distribution
of remuneration,
etc.,
among
each
member of
the
board
of directors
is
broadly
delegated to
the board
of directors and
the distribution of remuneration
among each audit & supervisory
board member is determined
by
consultation among the audit & supervisory
board members.
3.
Audit
Committee.
Toyota
avails
itself
of
paragraph
(c)(3)
of
Rule
10A-3
of
the
Exchange
Act,
which
provides
a
general
exemption
from
the
audit
committee
requirements
to
a
foreign
private
issuer
with
an
audit
&
supervisory board, subject to certain
requirements which continue
to be applicable under Rule 10A-3.
Pursuant
to
the
requirements
of
the
Companies
Act,
Toyota
elects
its
audit
&
supervisory
board
members
through
a
resolution
adopted
at
a
general
shareholders’
meeting.
Toyota
currently
has
six
audit
&
supervisory
board members, which
exceeds the minimum
number of audit & supervisory
board members required pursuant
to
the Companies Act.
Unlike
the
NYSE Corporate
Governance
Rules,
the
Companies
Act,
among
others,
does
not require
audit
&
supervisory board
members
to establish
an expertise
in accounting or
financial management
nor are
they required
to
present
other
special
knowledge
and
experience.
Therefore,
none
of
Toyota’s
audit
&
supervisory
board
members
has
“an
expertise
in
accounting
or
financial
management”
as
set
forth
in
the
NYSE
Corporate
Governance
Rules.
The
Japanese
Corporate
Governance
Code
indicates
that
persons
with
appropriate
experience
and
skills
as
well
as
necessary
knowledge
of
finance,
accounting,
and
laws
should
be
appointed
as
audit
&
supervisory
board
members,
and
in
particular,
one
or
more
audit
&
supervisory
board
members
who
have
sufficient
knowledge
of
finance
and
accounting
matters
should
be
appointed.
Toyota
has
appointed
persons
who
are
able
to
provide
opinions
and
advice
regarding
management
based
on
their
broader
experience
and
discretion
beyond
finance
and
accounting.
Under
the
Companies
Act,
the
audit
&
supervisory
board
may
determine
the
auditing
policies
and
methods
of
investigating
the
conditions
of
Toyota’s
business
and
assets,
and
may
resolve
other
matters
concerning
the
execution
of
the
audit
&
supervisory
board
member’s
duties.
The
audit
&
supervisory
board
also
prepares
auditors’
reports
and
gives
consent
to
proposals
of
the
nomination
of
audit
&
supervisory
board
members.
Further,
the
audit
&
supervisory
board
makes
decisions
concerning
proposals
relating
to
the
appointment
and
dismissal
of
accounting
auditors;
it
also
has
the
authority
to
dismiss
the
accounting auditor when certain matters
specified under the Companies
Act occur.
Toyota
currently
has
three
outside
audit
&
supervisory
board
members
under
the
Companies
Act.
Under
the
Companies Act,
at
least
half of
the
audit &
supervisory
board members
must be
an “outside”
audit
& supervisory
board member, which is any person who satisfies
all of the following requirements:
(a)
the person
has
never
been a
member
of the
board
of
directors,
accounting counselor
(in
the
case
that an
accounting
counselor
is
a
legal
entity,
an
employee
of
such
entity
who
is
in
charge
of
its
affairs),
executive
officer,
manager
or
employee
of
Toyota
or
its
subsidiaries
during
the
ten
year
period
before
becoming an outside audit & supervisory
board member;
(b)
if
the
person
was
an
audit
&
supervisory
board
member
of
Toyota
or
any of
its
subsidiaries
at any
time
during
the
ten
year
period
before
becoming
an
outside
audit
&
supervisory
board
member,
such
person
has
not
been
a
member
of
the
board
of
directors,
accounting
counselor
(in
the
case
that
an
accounting
counselor is
a
legal
entity, an
employee
of
such entity
who
is in
charge
of
its affairs),
executive
officer,
manager
or
employee
of
Toyota
or
any
of
its
subsidiaries
during
the
ten
year
period
before
becoming
an audit & supervisory board member
of Toyota or any of its subsidiaries;
and
121
(c)
the
person
is
not
a
spouse
or
relative
within
the
second
degree
of
kinship
of
any
member
of
the
board
of directors or manager or other
key employee of Toyota.
Such
qualifications
for
an
“outside”
audit
&
supervisory
board
member
are
different
from
the
audit
committee independence requirement
under the NYSE Corporate Governance Rules.
Each
of
the
outside
audit
&
supervisory
board
members
of
Toyota
satisfies
the
“independent
director/
audit
&
supervisory
board
member”
requirements
under
the
regulations
of
the
Japanese
stock
exchanges,
as
described above in “1. Members of the
Board of Directors.”
4.
Corporate
Governance
Guidelines.
Unlike
the
NYSE
Corporate
Governance
Rules,
Toyota
is
not
required
to
adopt
the
Japanese
Corporate
Governance
Code
under
Japanese
laws
and
regulations,
including
the
Companies
Act,
the
Financial
Instruments
and
Exchange
Law
of
Japan
and
stock
exchange
rules.
However,
if
Toyota
does
not
comply
with
the
Japanese
Corporate
Governance Code,
it
is
required
to
explain
the
reasons
why
it
does
not
do
so
in
accordance
with
the
regulations
of
the
Japanese
stock
exchanges.
In
addition,
Toyota
is
required to
resolve
at
the board
of
directors
matters
relating
to a
system, which
is required
under the
ordinance
of
the
Ministry
of
Justice
(“internal
control
system”
or
naibu-tosei
”),
to
ensure
the
execution
of
duties
of
the
members
of
the
board
of
directors
to
comply
with
laws,
regulations
and
articles
of
incorporation,
and
any
other
systems
to
ensure
the
adequacy
of
the
business,
and
to
disclose
such
matters
resolved,
policies
and
the
present
status
of
its
corporate
governance
in
its
business
reports,
annual
securities
report
and
certain
other
disclosure
documents
in
accordance
with
the
regulations
under
the
Financial
Instruments
and
Exchange
Law
and
stock
exchange rules in respect of timely
disclosure.
5.
Code
of
Business
Conduct
and
Ethics.
Similar
to
the
NYSE
Corporate
Governance
Rules,
under
the
Japanese
Corporate
Governance
Code,
Toyota
is
encouraged
to
adopt
a
code
of
conduct
regarding
ethical
business
activities
for
members
of
the
board
of
directors,
officers
and
employees.
Toyota
has
resolved
matters
relating
to
maintenance
of
an
“internal
control
system,”
or
naibu-tosei,”
in
order
to
ensure
its
employees
comply
with
laws,
regulations
and
the
articles
of
incorporation,
etc.,
pursuant
to
the
Companies
Act,
and
Toyota
maintains
guidelines
and
internal
regulations
such
as
“Guiding
Principles
at
Toyota,”
“Toyota
Code
of
Conduct”
and
a
code
of
ethics
pursuant
to
Section
406
of
the
Sarbanes-Oxley
Act.
Please
see
“Code
of
Ethics”
for
additional information.
ITEM
16H.
MINE
SAFETY
DISCLOSURE
Not applicable.
ITEM
16I.
DISCLOSURE
REGARDING
FOREIGN
J
URISDICTIONS
THAT
PREVENT
INSPECTIONS
Not applicable.
122
PART
III
ITEM
17.
FINANCIAL
STATEMENTS
Not applicable.
ITEM
18.
FINANCIAL
STATEMENTS
The following financial statements
are filed as part of this
annual report on Form 20-F.
123
TOYOTA
MOTOR
CORPORATION
INDEX
TO
CONSOLIDATED
FINANCIAL
STATEMENTS
Page
Report of Independent Registered Public Accounting
Firm (PCAOB ID: 2743)
....................
F-2
Consolidated statement of financial
position at March 31, 2021 and 2022
.........................
F-4
Consolidated statement of income
for the years ended March 31, 2020, 2021 and 2022
...............
F-6
Consolidated statement of comprehensive
income for the years
ended March 31, 2020, 2021 and 2022
. .
F - 7
Consolidated statement of changes
in equity for the years ended March
31, 2020, 2021 and 2022
.......
F-8
Consolidated statement of cash flows
for the years ended March 31, 2020, 2021 and 2022
............
F-1
0
Notes to consolidated financial
statements
..................................................
F-1
1
All
financial
statements
schedules
are
omitted
because
they
are
not
applicable
or
the
required
information
is
shown in the financial statements
or the notes thereto.
Financial
statements
of
50%
or
less
owned
persons
accounted
for
by
the
equity
method
have
been
omitted
because none of them meets the significance
tests specified
in Rule 3-09 of Regulation S-X.
F-1
Report
of
Independent
Registered
Public
Accounting
Firm
To the Shareholders and Board of Directors of
Toyota Jidosha Kabushiki Kaisha
(“Toyota Motor Corporation”)
Opinions
on
the
Financial
Statements
and
Internal
Control
over
Financial
Reporting
We have audited the accompanying consolidated statement of financial position of Toyota Motor Corporation
and its subsidiaries (collectively
referred
to
as
the
“Company”)
as
of
March
31,
2022
and
2021,
and
the
related
consolidated
statements
of
income,
comprehensive
income,
changes
in
equity
and
cash
flows
for
each
of
the
three
years
in
the
period
ended
March
31,
2022,
including
the
related
notes
(collectively
referred
to
as
the
“consolidated
financial
statements”).
We
also
have
audited
the
Company’s
internal
control
over
financial
reporting
as
of
March
31,
2022,
based
on
criteria
established
in
Internal
Control—Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations of the Treadway Commission (COSO).
In
our
opinion,
the
consolidated
financial
statements
referred
to
above
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Company
as
of
March
31,
2022
and
2021,
and
the
results
of
its
operations
and
its
cash
flows
for
each
of
the
three
years
in
the
period
ended
March
31,
2022
in
conformity
with
International
Financial
Reporting
Standards
as
issued
by
the
International
Accounting
Standards
Board.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2022,
based on criteria established in
Internal
Control—Integrated
Framework
(2013) issued by the COSO.
Basis
for
Opinions
The
Company’s
management
is
responsible
for
these
consolidated
financial
statements,
for
maintaining
effective
internal
control
over
financial
reporting,
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
Management’s
Annual
Report on
Internal
Control
Over
Financial
Reporting
appearing
under
Item 15(b).
Our
responsibility is
to
express
opinions on
the
Company’s
consolidated
financial
statements
and
on
the
Company’s
internal
control
over
financial
reporting
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Company
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities and Exchange Commission and the PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
consolidated
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud, and whether effective internal control
over financial reporting was maintained
in all material respects.
Our
audits
of
the
consolidated
financial
statements
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
consolidated
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
consolidated
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
consolidated
financial
statements.
Our
audit
of
internal
control
over
financial
reporting
included
obtaining
an
understanding
of
internal
control
over
financial
reporting,
assessing
the
risk
that
a
material
weakness
exists,
and
testing
and
evaluating
the
design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We
believe that our audits provide a reasonable
basis for our opinions.
Definition
and
Limitations
of
Internal
Control
over
Financial
Reporting
A
company’s
internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external
purposes
in
accordance
with
generally
accepted
accounting
principles. A
company’s
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that
(i)
pertain
to
the
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions
and
dispositions
of
the
assets
of
the
company;
(ii)
provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
accordance
with
generally
accepted
accounting
principles,
and
that
receipts
and
expenditures
of
the
company
are
being
made
only
in
accordance
with
authorizations
of
management
and
directors
of
the
company;
and
(iii)
provide
reasonable
assurance
regarding
prevention
or
timely
detection
of
unauthorized
acquisition, use, or disposition
of the company’s assets that could have a material
effect on the financial
statements.
Because
of
its
inherent
limitations, internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements. Also,
projections
of
any
evaluation
of
effectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that the degree of compliance with the policies
or procedures may deteriorate.
Critical
Audit
Matters
The
critical
audit
matters
communicated
below
are
matters
arising
from
the
current
period
audit
of
the
consolidated
financial
statements
that
were
communicated
or
required
to
be
communicated
to
the
audit
committee
and
that
(i)
relate
to
accounts
or
disclosures
that
are
material
to
the
consolidated
financial
statements
and
(ii)
involved
our
especially
challenging,
subjective,
or
complex
judgments.
The
communication
of
F-2
critical
audit
matters
does
not
alter
in
any
way
our
opinion
on
the
consolidated
financial
statements,
taken
as
a
whole,
and
we
are
not,
by
communicating
the
critical
audit
matters
below,
providing
separate
opinions
on
the
critical
audit
matters
or
on
the
accounts
or
disclosures
to
which they relate.
Liabilities
for
the
costs
of
recalls
and
other
safety
measures
As
described
in
Notes
3
and
24
to
the
consolidated
financial
statements, the
Company
accrues
for
costs
of
recalls
and
other
safety
measures.
As
of
March
31,
2022,
estimated
liabilities
for
the
costs
of
recalls
and
other
safety
measures totaled
¥1,171,213
million and
were
included
in
liabilities
for
quality
assurance
in
the
consolidated
statement
of
financial
position.
The
Company
measures
the
majority
of
liabilities
for
the
costs of recalls and other safety measures at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period
by
geographical
regions.
However,
when
circumstances
warrant,
the
Company
measures
liabilities
for
costs
of
a
particular
recall
or
other
safety
measures
using
an
individual
model
when
they
are
probable
and
reasonably
estimable.
Management
calculates
the
liabilities
for
the
costs
of
recalls
and
other
safety
measures
that
are
determined
comprehensively
based
on
the
accumulated
amount
of
repair
cost
paid
and
pattern of actual payment occurrence.
The
principal
considerations
for
our
determination
that
performing
procedures
relating
to
liabilities
for
the
costs
of
recalls
and
other
safety
measures
that
are
determined
comprehensively
is
a
critical
audit
matter
are
1)
significant
judgment
and
estimation
was
required
by
management when
developing
the
liabilities which
in turn
led
to a
high
degree
of
auditor judgment
and subjectivity
in
performing procedures
to evaluate
management’s
assumptions; and
2)
significant audit
effort
was
necessary relating
to testing
the
accumulated amount
of repair
cost
paid
and
pattern
of
actual
payment
occurrence
utilized
in
developing
the
estimate.
In
addition,
the
audit
effort
included
the
involvement
of
professionals with specialized skills
and knowledge to assist in performing
these procedures and evaluating the audit
evidence obtained.
Addressing
the
matter
involved
performing
procedures
and
evaluating
audit
evidence
in
connection
with
forming
our
overall
opinion
on
the
consolidated
financial
statements.
These
procedures
included
testing
the
effectiveness
of
controls
relating
to
liabilities
for
the
costs
of
recalls
and
other
safety
measures,
including
controls
related
to
the
determination
of
the
significant
assumptions
and
data
used
to
calculate
the
liabilities
that
are
determined
comprehensively.
These
procedures
also
included,
among
others:
1)
testing
management’s
process
for
estimating
the
liabilities,
including
evaluating
the
reasonableness
of
the
significant
assumptions;
and
2)
testing
of
the
completeness
and
accuracy
of
the
data
used
in
the
estimate.
We
also
utilized
professionals
with
specialized
skills
and
knowledge
to
assist
us
in
testing
the
liabilities
by
developing
an
independent
range
of
reasonable
estimated
loss
based
on
the
Company’s
data
and
independently
developed
assumptions.
Allowance
for
Credit
Losses—Retail
finance
receivables
As
described
in
Notes
3,
8
and
19
to
the
consolidated
financial
statements,
the
Company
measures
an
allowance
for
credit
losses
on
its
retail
finance receivables by estimating the expected credit losses at the reporting date. As of March 31, 2022, ¥230,104 million
of the allowance for
credit
losses
corresponding
to
¥17,647,440
million
of
retail
finance
receivables
was
recorded
in
the
consolidated
statement
of
financial
position.
The
allowance
for
credit
losses
on
retail
finance
receivables
is
measured
based
on
a
systematic,
ongoing
review
and
evaluation
performed as
part of
the
credit risk evaluation
process, historical loss
experience, the
size and
composition of the
portfolios, current economic
events
and
conditions,
the
estimated
fair
value
and
adequacy
of
collateral,
forward-looking
information
including
movements
of
the
world
economy
and
other
pertinent
factors.
In
calculating
the
expected
credit
losses,
the
Company
uses
the
probability of
a
default and
the
loss
rate
in
the
event
of
a
default
based
on
past
experience
and
then
reflects
adjustments
based
on
its
forecasts
of
current
and
future
economic
conditions. Retail
finance
receivables
within
the
United
States
represent approximately
a
half
of
the
consolidated retail
finance
receivables
as
of March 31, 2022.
The
principal
considerations
for
our
determination
that
performing
procedures
relating
to
the
allowance
for
credit
losses
on
retail
finance
receivables
is
a
critical
audit
matter
are
1)
there
was
a
significant
amount
of
judgment
by
management
when
determining
assumptions
of
the
probability
of
a
default,
the
loss
rate
in
the
event
of
a
default,
and
adjustments
based
on
the
forecasts
of
current
and
future
economic
conditions used
in
the
estimating
of the
allowance
for
credit
losses,
which
in
turn
led
to
a
high
degree of
auditor
judgment and
subjectivity in
performing
procedures
to
evaluate
those
management’s
assumptions
and
adjustments;
2)
there
was
a
high
level
of
complexity
in
assessing
audit evidence related
to management’s estimate.
In addition, the audit
effort included the involvement of
professionals with specialized skills
and knowledge to assist in performing these
procedures and evaluating the audit evidence obtained.
Addressing
the
matter
involved
performing
procedures
and
evaluating
audit
evidence
in
connection
with
forming
our
overall
opinion
on
the
consolidated
financial
statements.
These
procedures
included
testing
the
effectiveness
of
controls
relating
to
the
Company’s
allowance
for
credit losses on
retail finance
receivables, including controls over
data supporting
the assumptions, such as
the probability of a
default and the
loss rate
in the
event of
a default
based on
past experience,
and adjustments used
to
determine the allowance.
These procedures
also included,
among
others,
testing
management’s
process
for
estimating
the
allowance,
including
evaluating
the
reasonableness
of
the
assumptions
and
adjustments. We also used professionals with specialized skills and knowledge to assist us in evaluating the reasonableness of
the assumptions
and adjustments determined by management.
/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 23, 2022
We have served as the Company’s auditor since 2006.
F-3
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
FINANCIAL
POSITION
Yen
in
millions
Notes
March
31,
2021
March
31,
2022
Assets
Current assets
Cash and cash equivalents
.................................
6
5,100,857
6,113,655
Trade accounts and other receivables
........................
7
2,958,742
3,142,832
Receivables related to financial
services
......................
8
6,756,189
7,181,327
Other financial assets
....................................
9
4,215,457
2,507,248
Inventories
.............................................
10
2,888,028
3,821,356
Income tax receivable
....................................
112,458
163,925
Other current assets
......................................
745,070
791,947
Total current assets
......................................
22,776,800
23,722,290
Non-current assets
Investments accounted for using
the equity method
.............
11
4,160,803
4,837,895
Receivables related to financial
services
......................
8
12,449,525
14,583,130
Other financial assets
....................................
9
9,083,914
9,517,267
Property, plant and equipment
Land
..............................................
12
1,345,037
1,361,791
Buildings
..........................................
12
4,999,206
5,284,620
Machinery and equipment
.............................
12
12,753,951
13,982,362
Vehicles and equipment on operating leases
..............
12
6,203,721
6,781,229
Construction in progress
..............................
12
675,875
565,528
Total property, plant and equipment,
at cost
...............
12
25,977,791
27,975,530
Less - Accumulated depreciation and
impairment losses
.....
12
(14,566,638)
(15,648,890)
Total property, plant and equipment,
net
.................
12
11,411,153
12,326,640
Right of use assets
.......................................
13
390,144
448,412
Intangible assets
........................................
14
1,108,634
1,191,966
Deferred tax assets
......................................
15
336,224
342,202
Other non-current assets
..................................
23
549,942
718,968
Total non-current assets
..................................
39,490,339
43,966,482
Total assets
................................................
62,267,140
67,688,771
The accompanying notes are an integral
part of these consolidated financial
statements.
F-4
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
FINANCIAL
POSITION—(Continued)
Yen
in
millions
Notes
March
31,
2021
March
31,
2022
Liabilities
Current liabilities
Trade accounts and other payables
..........................
16
4,045,939
4,292,092
Short-term and current portion
of long-term debt
...............
17
12,212,060
11,187,839
Accrued expenses
.......................................
1,397,140
1,520,446
Other financial liabilities
..................................
18
763,875
1,046,050
Income taxes payable
....................................
350,880
826,815
Liabilities for quality
assurance
............................
24
1,482,872
1,555,711
Other current liabilities
...................................
1,207,700
1,413,208
Total current liabilities
...................................
21,460,466
21,842,161
Non-current liabilities
Long-term debt
.........................................
17
13,447,575
15,308,519
Other financial liabilities
..................................
18
323,432
461,583
Retirement benefit liabilities
...............................
23
1,035,096
1,022,749
Deferred tax liabilities
....................................
15
1,247,220
1,354,794
Other non-current liabilities
...............................
465,021
544,145
Total non-current liabilities
................................
16,518,344
18,691,790
Total liabilities
.............................................
37,978,811
40,533,951
Shareholders’ equity
Common stock
..........................................
25
397,050
397,050
Additional paid-in capital
.................................
25
497,275
498,575
Retained earnings
.......................................
25
24,104,176
26,453,126
Other components of equity
...............................
25
1,307,726
2,203,254
Treasury stock
..........................................
25
(2,901,680)
(3,306,037)
Total Toyota Motor Corporation shareholders’
equity
...........
25
23,404,547
26,245,969
Non-controlling interests
..................................
883,782
908,851
Total shareholders’ equity
.....................................
24,288,329
27,154,820
Total liabilities and shareholders’
equity
.............................
62,267,140
67,688,771
The accompanying notes are an integral
part of these consolidated financial
statements.
F-5
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
INCOME
Yen
in
millions
Notes
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
Sales revenues
Sales of products
..................
26
27,693,693
25,077,398
29,073,428
Financial services
..................
26
2,172,854
2,137,195
2,306,079
Total sales revenues
................
26
29,866,547
27,214,594
31,379,507
Costs and expenses
Cost of products sold
...............
23,103,596
21,199,890
24,250,784
Cost of financial services
............
1,381,755
1,182,330
1,157,050
Selling, general and administrative
....
2,981,965
2,634,625
2,975,977
Total costs and expenses
............
27,467,315
25,016,845
28,383,811
Operating income
......................
2,399,232
2,197,748
2,995,697
Share of profit (loss) of investments
accounted for using the equity method
. . .
11
310,247
351,029
560,346
Other finance income
...................
28
305,846
435,229
334,760
Other finance costs
.....................
28
(47,155)
(47,537)
(43,997)
Foreign exchange gain (loss), net
.........
(94,619)
15,142
216,187
Other income (loss), net
.................
(80,607)
(19,257)
(72,461)
Income before income taxes
.............
2,792,942
2,932,354
3,990,532
Income tax expense
....................
15
681,817
649,976
1,115,918
Net income
...........................
2,111,125
2,282,378
2,874,614
Net income attributable to
Toyota Motor Corporation
...........
2,036,140
2,245,261
2,850,110
Non-controlling interests
............
74,985
37,118
24,504
Net income
.......................
2,111,125
2,282,378
2,874,614
Yen
Earnings per share attributable
to Toyota
Motor Corporation
Basic
............................
29
145.49
160.65
205.23
Diluted
..........................
29
144.02
158.93
205.23
The accompanying notes are an integral
part of these consolidated financial
statements.
F-6
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
COMPREHENSIVE
INCOME
Yen
in
millions
Notes
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
Net income
...........................
2,111,125
2,282,378
2,874,614
Other comprehensive income, net of
tax
Items that will not be reclassified
to
profit (loss)
Net changes in revaluation of
financial assets measured
at fair
value through other
comprehensive income
........
25
(243,853)
387,427
(49,242)
Remeasurements of defined benefit
plans
......................
25
(43,399)
216,272
136,250
Share of other comprehensive
income of equity method
investees
...................
11,25
62,568
80,472
113,641
Total of items that will not
be
reclassified to profit
(loss)
.....
(224,684)
684,172
200,648
Items that may be reclassified
subsequently to profit (loss)
Exchange differences on
translating foreign operations
. .
25
(362,098)
403,636
902,844
Net changes in revaluation of
financial assets measured
at fair
value through other
comprehensive income
........
25
113,390
(83,503)
(154,174)
Share of other comprehensive
income of equity method
investees
...................
11,25
(35,253)
8,172
193,811
Total of items that may be
reclassified subsequently to
profit (loss)
.................
(283,961)
328,305
942,480
Total other comprehensive income,
net
o
ft
a
x .........................
25
(508,645)
1,012,476
1,143,129
Comprehensive income
.................
1,602,480
3,294,854
4,017,742
Comprehensive income for the period
attributable to
Toyota Motor Corporation
...........
1,555,009
3,217,806
3,954,350
Non-controlling interests
............
47,472
77,048
63,392
Comprehensive income
.............
1,602,480
3,294,854
4,017,742
The accompanying notes are an integral
part of these consolidated financial
statements.
F-7
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
CHANGES
IN
EQUITY
For the year ended March 31, 2020
Yen
in
millions
Notes
Common
stock
Additional
paid-in
capital
Retained
earnings
Other
components
of
equity
Treasury
stock
Toyota
Motor
Corporation
shareholders’
equity
Non-
controlling
interests
Total
shareholders’
equity
Balances at April 1, 2019
..........
397,050
487,162
20,613,776
1,016,035
(2,606,925)
19,907,100
748,110
20,655,210
Comprehensive income
Net income
.................
2,036,140
2,036,140
74,985
2,111,125
Other comprehensive income,
n
e
to
ft
a
x ................
25
(481,131)
(481,131)
(27,514)
(508,645)
Total comprehensive income
. . .
2,036,140
(481,131)
1,555,009
47,472
1,602,480
Transactions with owners and other
Dividends paid
..............
25
(618,801)
(618,801)
(54,956)
(673,756)
Repurchase of treasury stock
. . .
25
(500,309)
(500,309)
(500,309)
Reissuance of treasury stock
. . .
25
4,053
20,128
24,181
24,181
Change in scope of equity
method
..................
253,590
253,590
253,590
Equity transactions and other
. . .
(1,882)
(1,882)
(20,503)
(22,384)
Total transactions with owners
and other
.................
2,171
(365,211)
(480,181)
(843,221)
(75,458)
(918,679)
Reclassification to retained
earnings
.....................
25
(50,644)
50,644
Balances at March 31, 2020
........
397,050
489,334
22,234,061
585,549
(3,087,106)
20,618,888
720,124
21,339,012
For the year ended March 31, 2021
Yen
in
millions
Notes
Common
stock
Additional
paid-in
capital
Retained
earnings
Other
components
of
equity
Treasury
stock
Toyota
Motor
Corporation
shareholders’
equity
Non-
controlling
interests
Total
shareholders’
equity
Balances at April 1, 2020
..........
397,050
489,334
22,234,061
585,549
(3,087,106)
20,618,888
720,124
21,339,012
Comprehensive income
Net income
.................
2,245,261
2,245,261
37,118
2,282,378
Other comprehensive income,
n
e
to
ft
a
x ................
25
972,546
972,546
39,930
1,012,476
Total comprehensive income
. . .
2,245,261
972,546
3,217,806
77,048
3,294,854
Transactions with owners and other
Dividends paid
..............
25
(625,514)
(625,514)
(36,598)
(662,112)
Repurchase of treasury stock
. . .
25
(118)
(118)
(118)
Reissuance of treasury stock
. . .
25
15,041
185,544
200,585
200,585
Change in scope of
consolidation
.............
102,588
102,588
Equity transactions and other
. . .
(7,099)
(7,099)
20,620
13,521
Total transactions with owners
and other
.................
7,942
(625,514)
185,426
(432,147)
86,610
(345,537)
Reclassification to retained
earnings
.....................
25
250,369
(250,369)
Balances at March 31, 2021
........
397,050
497,275
24,104,176
1,307,726
(2,901,680)
23,404,547
883,782
24,288,329
The accompanying notes are an integral
part of these consolidated financial
statements.
F-8
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
CHANGES
IN
EQUITY—(Continued)
For the year ended March 31, 2022
Yen
in
millions
Notes
Common
stock
Additional
paid-in
capital
Retained
earnings
Other
components
of
equity
Treasury
stock
Toyota
Motor
Corporation
shareholders’
equity
Non-
controlling
interests
Total
shareholders’
equity
Balances at April 1, 2021
..........
397,050
497,275
24,104,176
1,307,726
(2,901,680)
23,404,547
883,782
24,288,329
Comprehensive income
Net income
.................
2,850,110
2,850,110
24,504
2,874,614
Other comprehensive income,
n
e
to
ft
a
x ................
25
1,104,240
1,104,240
38,889
1,143,129
Total comprehensive income
. . .
2,850,110
1,104,240
3,954,350
63,392
4,017,742
Transactions with owners and other
Dividends paid
..............
25
(709,872)
(709,872)
(51,723)
(761,595)
Repurchase of treasury stock
. . .
25
(404,718)
(404,718)
(404,718)
Reissuance of treasury stock
. . .
25
227
362
588
588
Equity transactions and other
. . .
1,074
1,074
13,400
14,473
Total transactions with owners
and other
.................
1,300
(709,872)
(404,357)
(1,112,928)
(38,323)
(1,151,252)
Reclassification to retained
earnings
.....................
25
208,712
(208,712)
Balances at March 31, 2022
........
397,050
498,575
26,453,126
2,203,254
(3,306,037)
26,245,969
908,851
27,154,820
The accompanying notes are an integral
part of these consolidated financial
statements.
F-9
TOYOTA
MOTOR
CORPORATION
CONSOLIDATED
STATEMENT
OF
CASH
FLOWS
Yen
in
millions
Notes
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
Cash flows from operating activities
Net income
..........................................
2,111,125
2,282,378
2,874,614
Depreciation and amortization
...........................
1,595,347
1,644,290
1,821,880
Interest income and interest costs
related to financial services,
n
e
t
...............................................
(193,046)
(236,862)
(354,102)
Share of profit (loss) of investments
accounted for using the
equity method
......................................
(310,247)
(351,029)
(560,346)
Income tax expense
...................................
681,817
649,976
1,115,918
Changes in operating assets and liabilities,
and other
.........
(1,319,537)
(1,063,562)
(1,130,667)
(Increase) decrease in trade accounts and other
receivables
....................................
257,588
5,027
118,652
(Increase) decrease in receivables related
to financial
services
.......................................
(1,214,742)
(1,243,648)
(1,213,234)
(Increase) decrease in inventories
....................
(163,109)
(242,769)
(725,285)
(Increase) decrease in other current assets
..............
(308,342)
(163,473)
71,314
Increase (decrease) in trade accounts and other
payables
. .
(129,053)
384,142
152,399
Increase (decrease) in other current liabilities
...........
258,904
282,197
410,546
Increase (decrease) in retirement
benefit liabilities
.......
43,270
55,281
60,419
Other, net
.......................................
(64,053)
(140,319)
(5,478)
Interest received
......................................
798,458
776,748
835,739
Dividends received
....................................
318,408
294,520
347,387
Interest paid
.........................................
(506,307)
(459,181)
(418,043)
Income taxes paid, net of refunds
.........................
(777,522)
(810,117)
(809,763)
Net cash provided by (used in) operating activities
...........
2,398,496
2,727,162
3,722,615
Cash flows from investing activities
Additions to fixed assets excluding equipment
leased to
others
............................................
(1,246,293)
(1,213,903)
(1,197,266)
Additions to equipment leased to others
...................
(2,195,291)
(2,275,595)
(2,286,893)
Proceeds from sales of fixed assets
excluding equipment leased
to others
..........................................
47,949
40,542
37,749
Proceeds from sales of equipment leased
to others
...........
1,391,193
1,371,699
1,542,132
Additions to intangible assets
............................
(304,992)
(278,447)
(346,085)
Additions to public and corporate bonds and stocks
..........
(2,405,337)
(2,729,171)
(2,427,911)
Proceeds from sales of public and corporate
bonds and stocks
. .
1,151,463
1,020,533
282,521
Proceeds upon maturity of public and corporate
bonds
........
1,224,185
1,041,385
1,920,116
Other, net
...........................................
33
212,473
(1,661,218)
1,898,143
Net cash provided by (used in) investing activities
...........
(2,124,650)
(4,684,175)
(577,496)
Cash flows from financing activities
Increase (decrease) in short-term
debt
.....................
17
279,033
(1,038,438)
(579,216)
Proceeds from long-term debt
...........................
17
5,690,569
9,656,216
8,122,678
Payments of long-term debt
.............................
17
(4,456,913)
(5,416,376)
(8,843,665)
Dividends paid to Toyota Motor Corporation common
shareholders
.......................................
25
(618,801)
(625,514)
(709,872)
Dividends paid to non-controlling interests
.................
(54,956)
(36,598)
(51,723)
Reissuance (repurchase) of treasury stock
..................
(476,128)
199,884
(404,718)
Net cash provided by (used in) financing activities
...........
362,805
2,739,174
(2,466,516)
Effect of exchange rate changes on cash and cash equivalents
......
(141,007)
220,245
334,195
Net increase (decrease) in cash and cash equivalents
.............
495,645
1,002,406
1,012,798
Cash and cash equivalents at beginning of year
..................
6
3,602,805
4,098,450
5,100,857
Cash and cash equivalents at end of year
.......................
6
4,098,450
5,100,857
6,113,655
The accompanying notes are an integral
part of these consolidated financial
statements.
F-10
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS
1.
Reporting
entity
TMC
is
a
limited
liability,
joint-stock
company
located
in
Japan,
and
TMC’s
principal
executive
offices
are
registered
in
Toyota
City,
Aichi
Prefecture
.
The
consolidated
financial
statements
of
the
group
consist
of
TMC,
its consolidated subsidiaries
(collectively, “Toyota”)
and their interests in associates
and joint ventures.
Toyota
and
its
associates
are
primarily
engaged
in
the
design,
manufacture,
and
sale
of
sedans,
minivans,
compact
cars,
SUVs,
trucks
and
related
parts
and
accessories
throughout
the
world.
In
addition,
Toyota
and
its
associates
provide
financing,
vehicle
leasing
and
certain
other
financial
services
primarily
to
its
dealers
and
their
customers to support the sales
of vehicles and other products manufactured
by Toyota and its associates.
2.
Basis
of
preparation
(1)
Compliance
with
international
financial
reporting
standards
Toyota’s
consolidated
financial
statements
have
been
prepared
in
accordance
with
IFRS
as
issued
by
the
IASB.
The
consolidated
financial
statements
were
approved
on
June
23,
2022
by
President,
member
of
the
Board
of Directors Akio Toyoda and CFO, member of the Board of Directors
Kenta Kon.
(2)
Basis
of
measurement
Toyota’s
consolidated
financial
statements
have
been
prepared
on
a
historical
cost
basis,
except
for
certain
financial
assets
and
liabilities
measured
at
fair
value
and
assets
and
liabilities
associated
with
defined
benefit
plans indicated in “3. Significant
accounting policies”.
(3)
Functional
currency
and
presentation
currency
The
consolidated
financial
statements
are
presented
in
Japanese
yen,
which
is
the
functional
currency
of
TMC.
All
financial
information
presented
in
Japanese
yen
has
been
rounded
to
the
nearest
million
Japanese
yen,
except when otherwise indicated. Amounts may
not sum to totals due to rounding.
3.
Significant
accounting
policies
Basis
of
consolidation
-
(1) Subsidiaries
The
consolidated
financial
statements
include
the
accounts
of
TMC,
its
subsidiaries
that
are
controlled
by
TMC,
and
those
structured
entities
that
are
controlled
by
Toyota.
Toyota
controls
an
entity
when
Toyota
is
exposed
or
has
rights
to
variable
returns
from
involvement
with
the
entity,
and
has
the
ability
to
affect
those
returns by using its power over the entity.
The
financial
statements
of
subsidiaries
have
been
adjusted
in
order
to
ensure
consistency
with
the
accounting
policies
adopted
by
Toyota
as
necessary.
All
significant
intercompany
balances
and
transactions
as
well as the unrealized profit
have been eliminated in consolidation.
Changes
in
a
subsidiary’s
ownership
interests
that
do
not
result
in
a
loss
of
control
are
accounted
for
as
equity
transactions.
When
control
over
a
subsidiary
is
lost,
any
gain
or
loss
on
the
disposal
of
the
interest
sold
is
recognized in profit or loss.
F-11
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(2) Associates and joint ventures
Associates
are
entities
over
which
Toyota
has
a
significant
influence
over
the
decisions
on
financial
and
operating policies, but does not have control
or joint control.
Joint
ventures
are
entities
over
which
two
or
more
parties
including
Toyota
have
joint
control,
based
on
a
contractual
arrangement,
and
financial
and
business
decisions
about
the
relevant
activities
of
which
require
unanimous consent of the parties
that have joint control.
Investments
in
associates
and
joint
ventures
are
accounted
for
using
the
equity
method.
The
financial
statements
of
associates
and joint
ventures
have
been
adjusted
in
order
to ensure
consistency
with the
accounting
policies adopted by Toyota as necessary.
When the
use of the
equity
method is
discontinued from
the
date when the
investees
are determined
to be no
longer
associates
or
joint
ventures,
any
gain
or
loss
on
such
disposal
of
the
investment
is
recognized
in
profit
or
loss.
Foreign
currency
translation
-
(1) Foreign currency transactions
Foreign
currency
transactions
are
translated
into
the
respective
functional
currencies
of
Toyota
at
the
exchange
rates
prevailing
when
such
transactions
occur.
All
foreign
currency
receivables
and
payables
are
translated
into
the
respective
functional
currencies
at
the
applicable
exchange
rates
at
the
end
of
the
reporting
period. Non-monetary
assets and liabilities
in foreign
currencies
that are measured
at fair
value are translated
into
the functional
currency
using the
exchange
rate
on
the date
when
the fair
value
was
measured.
Gains or
losses
on
exchange differences
arising from
settlement of
foreign currency
receivables and payables
or on their
translations
at
the
end
of
the
reporting
date
are
recognized
in
profit
or
loss.
Furthermore,
exchange
differences
arising
from
equity
financial
assets
measured
at
fair
value
through
other
comprehensive
income
is
recognized
as
other
comprehensive income.
(2) Foreign operations
All
assets
and
liabilities
of
foreign
subsidiaries,
associates
and
joint
ventures
(collectively,
“foreign
operations”)
that
use
a
functional
currency
other
than
Japanese
yen
are
translated
into
Japanese
yen
at
the
exchange
rates
at
the
end
of
the
reporting
period.
All
revenues
and
expenses
of
foreign
operations
are
translated
into
Japanese
yen
at
the
average
exchange
rate
for
the
period
unless
the
exchange
rate
fluctuates
widely.
Exchange
differences
arising
from
such
translations
are
recognized
in
other
comprehensive
income
and
accumulated
in
other
components
of
equity
in
the
consolidated
statement
of
financial
position.
When
a
foreign
operation
is
disposed
of,
and
control,
significant
influence
or
joint
control
over
the
foreign
operation
is
lost,
the
cumulative
amount
of
exchange
differences
relating
to
the
foreign
operation
is
reclassified
from
equity
to
profit
or loss.
Cash
and
cash
equivalents
-
Cash
and
cash
equivalents
consist
of
cash
on
hand,
demand
deposits,
and
short-term
investments
that
are
readily
convertible
to
cash
and
are
subject
to
insignificant
risk
of
changes
in
value
with
three
months
or
less
maturities from the acquisition
date.
F-12
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Financial
instruments
-
(1) Financial assets
(i) Initial recognition
and measurement
Toyota
initially
recognizes
financial
assets
when
it
becomes
a party
to
a
contract
and
except
for
derivatives,
classifies
financial
assets
into
“financial
assets
measured
at
amortized
cost”,
“debt
and
equity
financial
assets
measured
at
fair
value
through
other
comprehensive
income”
or
“financial
assets
measured
at
fair
value
through
profit
or
loss”.
The
sale
or
purchase
of
financial
assets
that
occurred
in
the
normal
course
of
business
are
recognized and derecognized at the trade
date.
Financial
assets
classified
as
being
measured
at
fair
value
through
profit
or
loss
are
measured
at
fair
value,
but
other
financial
assets
are
initially
recognized
and
measured
at
fair
value
adding
transaction
costs
directly
attributable
to
acquisition.
Trade
receivables
that
do
not
contain
significant
financial
elements
are
measured
at
the transaction price.
(a) Financial assets measured
at amortized cost
Toyota classifies a financial
asset as measured at amortized
cost if both of the following
conditions are met:
The
asset
is
held
within
a
business
model
whose
objective
is
to
hold
financial
assets
in
order
to
collect
contractual cash flows; and
The
contractual
terms
of
the
financial
asset
give
rise
on
specified
dates
to
cash
flows
that
are
solely
payments of principal and interest
on the principal amount outstanding.
(b) Debt financial assets measured
at fair value through other
comprehensive income
Debt financial
assets are
measured at
fair value through
other comprehensive
income only
if it meets
both of
the following conditions:
The
asset
is
held
within
a
business
model
whose
objective
is
achieved
by
both
collecting
contractual
cash
flows and selling financial assets;
and
The
contractual
terms
of
the
financial
asset
give
rise
on
specified
dates
to
cash
flows
that
are
solely
payments of principal and interest
on the principal amount outstanding.
(c) Equity financial assets
measured at fair value through
other comprehensive income
For
equity
financial
assets
such
as
shares
held
mainly
for
the
purpose
of
maintaining
or
enhancing
business
relationships
with
investees
are
irrevocably
designated
at
initial
recognition,
as
financial
assets
measured
at
fair
value through other comprehensive income.
(d) Financial assets measured
at fair value through profit
or loss
Financial assets
other
than
(a)
to (c)
are
classified
as financial
assets
measured
at fair
value through
profit
or
loss.
(ii) Subsequent measurement
After initial recognition,
financial assets are measured
based on the following classification.
F-13
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(a) Financial assets measured
at amortized cost
Financial
assets
measured
at
amortized
cost
are
measured
at
amortized
cost
using
the
effective
interest
method.
(b) Debt financial assets measured
at fair value through other
comprehensive income
Subsequent
changes
in
fair
value
of
the
financial
assets
are
recognized
as
other
comprehensive
income.
Impairment
gains
or
losses,
interest
income
and
foreign
exchange
gains
and
losses
are
recognized
in
profit
or
loss.
When
the
financial
assets
are
derecognized,
the
cumulative
gain
or
loss
recognized
in
other
comprehensive
income is reclassified
from other components of equity to
profit or loss.
(c) Equity financial assets
measured at fair value through
other comprehensive income
Subsequent
changes
in
fair
value
of
the
financial
assets
are
recognized
as
other
comprehensive
income.
When
the
financial
assets
are
derecognized,
the
cumulative
gain or
loss
recognized
through
other
comprehensive
income
is
reclassified
from
other
components
of
equity
to
retained
earnings.
Dividends
from
equity
financial
assets are recognized in profit
or loss.
(d) Financial assets measured
at fair value through profit
or loss
Subsequent changes in the fair value of
the financial assets are
recognized in profit or loss.
(iii) Impairment of
financial assets
An
allowance
for
credit
losses
is
provided
for
expected
credit
losses
on
financial
assets
that
are
measured
at
amortized
cost
as
well
as
debt
financial
assets
measured
at
fair
value
through
other
comprehensive
income.
An
allowance for credit
losses is also provided for expected
credit losses on loan commitments
or financial
guarantee
agreements that are off-balance
sheet credit exposures.
At
the
end
of
the
reporting
period,
Toyota
assesses
whether
the
credit
risk
on
financial
assets
have
significantly
increased
since
initial
recognition.
At
the
end
of
the
reporting
period,
if
Toyota
identifies
a
significant
increase
in
credit
risk,
allowances
for
credit
losses
are
measured
as
being
equal
to
the
amount
of
expected
credit
losses
that
would
result
from
default
events
that
are
possible
over
the
expected
life
of
a
financial
asset.
At
the
end
of
the
reporting
period,
if
the
credit
risk
for
a
financial
instrument
has
not
increased
significantly
since
its
initial
recognition,
allowances
for
credit
losses
are
measured
as
being
equal
to
the
amount
of
the
expected
credit
losses
caused
by
default
events
that
may
occur
within
12
months
from
the
end
of
the
reporting period.
For
accounts
receivable
that
are
included
in
“Trade
accounts
and
other
receivables”
and
finance
lease
receivables,
the
allowance
is
continuously
measured at
amounts
equal
to expected
credit
losses
over
the expected
life of financial assets.
The
amount
of
expected
credit
losses
is
measured
as
the
present
value
of
all
cash
short
falls
resulting
from
the
difference
between
the
cash
flows
due
to
Toyota
in
accordance
with
the
contract
and
cash
flows
that
Toyota
expects
to
receive,
and
such
amount
is
recognized
in
profit
or
loss.
A
reversal
of
the
allowance
for
credit
losses
resulting from a reduction
in the amount of expected credit
losses is recognized in profit
or loss.
If
there
is
objective
evidence
of
impairment
such
as
significant
financial
difficulty
of
a
borrower,
or
a
default
or
delinquency
by
a
borrower,
interest
income
is
measured
applying
the
effective
interest
method
to
the
F-14
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
net
carrying
amount
of
the
financial
asset
(after
deducting
the
allowance
for
credit
loss).
Financial
assets
are
written
off
either
partially
or
fully
when
there
is
no
reasonable
expectation
of
recovering
a
financial
asset
in
its
entirely or a portion thereof.
(iv) Derecognition of financial
assets
Toyota
derecognizes
a
financial
asset
when
the
contractual
rights
to
the
cash
flows
from
the
asset
expire,
or
when
Toyota
transfers
the
contractual
right
to
receive
cash
flows
from
financial
assets
in
transactions
in
which
substantially
all
the
risks
and
rewards
of
ownership
of
the
asset
are
transferred
to
another
entity.
Even
if
Toyota
transfers
a
financial
asset,
it
neither
transfers
nor
holds
substantially
all
the
risks
and
rewards
of
ownership
of
such
transferred
financial
asset.
Further,
in
cases
where
Toyota
continues
to
control
such
a
transferred
financial
asset,
Toyota
recognizes
the
retained
interest
on
such
financial
asset
and
the
relevant
liabilities
that
might
possibly be paid in association therewith.
(2) Financial liabilities
(i) Initial recognition
and measurement
Toyota
initially
measures
financial
liabilities
other
than
derivatives
at
fair
value
less
transaction
costs
directly attributable
to the issuance of financial liabilities.
(ii) Subsequent measurement
Toyota
subsequently
measures
financial
liabilities
at
amortized
cost
using
the
effective
interest
method.
Amortization
under
the
effective
interest
method
and
gain
or
losses
on
derecognition
are
recognized
as
finance
income or costs and recognized in profit
or loss.
(iii) Derecognition of financial
liabilities
Toyota
derecognizes
financial
liabilities
when
the
financial
liabilities
expire,
that
is,
when
the
liability
identified in the contract
expires due to performance, discharges,
cancels, or expires.
(3) Derivative financial instruments
Toyota
employs
derivative
financial
instruments,
including
forward
foreign
exchange
contracts,
foreign
currency
options,
interest
rate
swaps,
interest
rate
currency
swap
agreements
and
interest
rate
options,
to
manage
its
exposure
to
fluctuations
in
interest
rates
and
foreign
currency
exchange
rates.
All
derivative
transactions
are
measured at fair value as assets
or liabilities.
Toyota does not use derivative financial
instruments for speculative
or trading purposes.
Finance
receivables
-
Finance
receivables
recorded
on
Toyota’s
consolidated
statement
of
financial
position
are
net
of
any
unearned
financial
income
and
deferred
origination
costs
and
the
allowance
for
credit
losses.
Deferred
origination costs are amortized
so as to approximate a level
rate of return over the term
of the related contracts.
F-15
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
determination
of
finance
receivable
portfolios
is
based
primarily
on
the
qualitative
consideration
of
the
nature
of
Toyota’s
business
operations
and
finance
receivables.
The
three
portfolios
within
finance
receivables
are as follows:
(1) Retail receivables portfolio
The
retail
receivables
portfolio
consists
of
retail
installment
sales
contracts
acquired
mainly
from
dealers
(“auto
loans”)
including
credit
card
loans.
These
contracts
acquired
must
first
meet
specified
credit
standards.
Thereafter, Toyota retains responsibility
for contract collection
and administration.
The
contract
periods
of
auto
loans
primarily
range
from
2
to
7
years.
Toyota
acquires
security
interests
in
the
vehicles
financed
and
has
the
right
to
repossess
vehicles
if
customers
fail
to
meet
their
contractual
obligations. Almost
all auto
loans are
non-recourse, which relieves
the dealers
from financial
responsibility
in the
event of repossession.
Toyota
manages
the
retail
receivables
portfolio
as
one
portfolio
based
on
common
risk
characteristics
associated
with
the
underlying
finance
receivables,
the
similarity
of
the
credit
risks,
and
the
quantitative
materiality.
(2) Finance lease receivables
portfolio
Toyota
acquires
new
vehicle
lease
contracts
originated
primarily
through
dealers.
The
contract
periods
of
these
primarily
range
from
2
to
5
years.
Lease
contracts
acquired
must
first
meet
specified
credit
standards
after
which
Toyota
assumes
ownership
of
the
leased
vehicle.
Toyota
is
responsible
for
contract
collection
and
administration during the lease
period.
Toyota
is
generally
permitted
to
take
possession
of
the
vehicle
upon
a
default
by
the
lessee.
The
residual
value
is
estimated
at
the
time
the
vehicle
is
first
leased.
Vehicles
returned
to
Toyota
at
the
end
of their
leases
are
sold by auction.
Toyota
manages
the
finance
lease
receivables
portfolio
as
one
portfolio
based
on
common
risk
characteristics associated
with the underlying finance receivables
and the similarity
of the credit risks.
(3) Wholesale and other dealer
loan receivables portfolio
Toyota
provides
wholesale
financing
to
qualified
dealers
to
finance
inventories.
Toyota
acquires
security
interests
in vehicles
financed
at
wholesale.
In cases
where
additional
security
interests
would be
required, Toyota
takes
dealership
assets
or
personal
assets,
or
both, as
additional
security.
If
a dealer
defaults,
Toyota has
the right
to liquidate any assets acquired.
Toyota
also
makes
term
loans
to
dealers
for
business
acquisitions,
facilities
refurbishment,
real
estate
purchases
and
working
capital
requirements.
These
loans
are
typically
secured
with
liens
on
real
estate,
other
dealership assets and/or personal
assets of the dealers.
Toyota
manages
the
wholesale
and
other
dealer
loan
receivables
portfolio
as
one
portfolio
based
on
the
risk
characteristics associated
with the underlying finance receivables.
Allowance
for
credit
losses
on
finance
receivables
-
The
allowance
for
credit
losses
on
finance
receivables
is
measured
at
the
portfolio
level,
based
on
a
systematic,
ongoing
review
and
evaluation
performed
as
part
of
the
credit
risk
evaluation
process,
historical
loss
F-16
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
experience,
the
size and
composition
of
the portfolios,
current
economic
events
and
conditions,
the estimated
fair
value
and
adequacy
of
collateral,
forward-looking
information
including
movements
of
the
world
economy
and
other
pertinent
factors.
Furthermore,
portfolios
are
grouped
based
on
similarities
of
risk
characteristics,
such
as
product and collateral classes,
when calculating expected credit
losses in the aggregate.
(1) Retail receivables portfolio
With
respect
to
retail
receivables,
Toyota
reviews
whether
the
credit
risk
on
finance
receivables
has
increased
significantly.
To
evaluate
the
risk,
Toyota
uses
the changes
for
the
possibility
of a
credit
loss occurring
or
days
in
arrears
as
an
index.
Toyota
assesses
the
significant
increases
in
credit
risk
when
contractual
payments
are
more
than
30
days
past
due.
When
the
credit
risk
on
finance
receivables
has
not
increased
significantly
since
initial
recognition,
Toyota
measures
the
loss
allowance
for
that
finance
receivables
at
an
amount
equal
to
12-month expected credit losses
at the reporting date.
Meanwhile,
Toyota
measures
the
loss
allowance
for
finance
receivables
at
an
amount
equal
to
the
lifetime
expected
credit
losses
if
the
credit
risk
on
that
finance
receivables
has
increased
significantly
since
initial
recognition
at
the
reporting
date.
Toyota
calculates
the
loss
allowance
for
finance
receivables
at
an
amount
equal
to
the
lifetime
expected
credit
losses
by
considering
historical
credit
loss
experience
and
future
collectability,
when
there
is
evidence
that
finance
receivables
is
credit-impaired
such
as
a
breach
of
contract
due
to
default
or
delayed contractual payments.
In calculating
expected credit
losses,
Toyota uses
the probability
of a default
and the loss
rate in the
event of
a default based on past experience
and then reflects its forecasts
of current and future economic
conditions.
Suspension
of
payment
over
a
certain
period
of
time
and
or
situations
which
contractual
obligations
are
not
being met are considered as being
in default in accordance with internal
management rules.
(2) Finance lease receivables
portfolio
With respect
to the
finance lease
receivables
portfolio,
Toyota always
measures
loss allowance
at an amount
equal
to
lifetime
expected
credit
losses.
Suspension
of
payment
over
a
certain
period
of
time
and/or
situations
which
contractual
obligations
are
not
being
met
are
considered
as
being
in
default
in
accordance
with
internal
management rules.
(3) Wholesale and other dealer
loan receivables portfolio
With respect
to the
wholesale and
other dealer
loan
receivables
portfolio, receivables
are sorted
primarily by
credit qualities
based on internal
risk assessments.
Toyota reviews
the change of the
segment as an
index whether
the
credit
risk
on
finance
receivables
has
increased
significantly
since
initial
recognition
to
assess
these
receivables
for
credit
risk.
Toyota
assesses
the
significant
increases
in
credit
risk
when
contractual
payments
are
more
than
30
days
past
due.
If
the
credit
risk
on
finance
receivables
has
not
increased
significantly
since
initial
recognition,
Toyota
measures
the
loss
allowance
for
that
finance
receivables
at
an
amount
equal
to
12-month
expected credit losses at the
reporting date.
Meanwhile,
Toyota
measures
the
loss
allowance
for
finance
receivables
at
an
amount
equal
to
the
lifetime
expected
credit
losses
if
the
credit
risk
on
that
finance
receivables
has
increased
significantly
since
initial
recognition
at
the
reporting
date.
Toyota
calculates
the
loss
allowance
for
finance
receivables
at
an
amount
equal
to
the
lifetime
expected
credit
losses
by
considering
historical
credit
loss
experience
and
future
collectability,
when
there
is
evidence
that
finance
receivables
are
credit-impaired
such
as
a
debtor’s
worsened
financial
conditions, breach of contract due
to default or delayed contractual
payments.
F-17
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
In calculating
expected credit
losses,
Toyota uses
the probability
of a default
and the loss
rate in the
event of
a default based on past experience
and then reflects its forecasts
of current and future economic
conditions.
Suspension
of
payment
over
a
certain
period
of
time
and/or
situations
where
contractual
obligations
are
not
being met are considered as defaults
in accordance with internal
management rules.
Although
Toyota
considers
the
allowance
for
credit
losses
on
finance
receivables
to
be
adequate
based
on
information
currently
available,
additional
provisions
may
be
necessary
due
to
(i)
changes
in
management
estimates
and
assumptions
about
asset
impairments,
(ii)
information
that
indicates
changes
in
expected
future
cash
flows,
or
(iii)
changes
in
economic
and
other
events
and
conditions.
Future
changes
in
the
economy
that
impact
the
consumer
confidence
such
as
increasing
interest
rates
and
a
rise
in
the
unemployment
rate
as
well
as
higher
debt
balances,
coupled
with
deterioration
in
actual
and
expected
used
vehicle
values,
could
negatively
affect future operating results
of the financial services
operations.
Inventories
-
Inventories
are
valued
at
cost,
not
in
excess
of
net
realizable
value.
Net
realizable
value
is
the
estimated
selling
price
in
the
ordinary
course
of
business
less
the
estimated
original
cost
and
estimated
selling
expense
to
product
completion.
The
cost
of
inventories
includes
purchase
costs,
conversion
costs
and
other
costs
incurred
in
bringing
the
inventories
to
their
present
location
and
condition.
The
cost
is
determined
principally
by
using
the
weighted-average method.
Property,
plant
and
equipment
-
Property,
plant
and
equipment
is
measured
based
on
the
cost
model
and
carried
at
its
cost
less
accumulated
depreciation
and
impairment
losses.
Expenditures
relating
to
major
renewals
and
improvements
are
capitalized;
minor
replacements,
maintenance
and
repairs
are
charged
to
current
operations
as
incurred.
Depreciation
of
property, plant
and equipment,
except
for land
that is
not subject
to
depreciation, is
calculated
on the
straight-line
method over the estimated
useful life of the
respective assets according
to general class, type of structure
and use.
The
estimated
useful
lives
range
from
2
to
65
years
for
buildings
and
from
2
to
20
years
for
machinery
and
equipment.
The
depreciation
method,
useful
lives
and
residual
values
of
property,
plant
and
equipment
are
reviewed
annually at each fiscal year
end, and adopted prospectively, if applicable.
Vehicles and
equipment on
operating leases
to
third parties
are originated
by dealers
and acquired
by certain
consolidated
subsidiaries.
Such
subsidiaries
are
also
the
lessors
of
certain
property
that
they
acquire
directly.
Vehicles
and
equipment
on
operating
leases
are
depreciated
on
a
straight-line
method
over
the
lease
term,
generally
from
2
to
5
years,
to
the
estimated
residual
value.
Incremental
direct
costs
incurred
in
connection
with
the acquisition of lease contracts
are capitalized and
amortized on a straight-line
method over the lease term.
Toyota
is
exposed
to
risk
of
loss
on
the
disposition
of
off-lease
vehicles
to
the
extent
that
sales
proceeds
are
not
sufficient
to
cover
the
carrying
value
of
the
leased
asset
at
lease
termination.
Toyota
evaluates
at
the
end
of
each
reporting
period
the
estimated
residual
value
to
cover
probable
estimated
losses
related
to
unguaranteed
residual
values
on
its
owned
portfolio.
The
estimate
is
calculated
considering
projected
vehicle
return
rates
and
projected
loss
severity.
Factors
considered
in
the
determination
of
projected
return
rates
and
loss
severity
include
historical
and
market
information
on
used
vehicle
sales,
trends
in
lease
returns
and
new
car
markets,
and
general
economic
conditions.
Toyota
evaluates
the
foregoing
factors,
develops
several
potential
loss
scenarios,
and
evaluates
the
estimated
residual
value
to
determine
whether
it
is
considered
adequate
to
cover
the
probable
range
of losses.
F-18
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
By
evaluating
estimated
residual
value,
Toyota
reflects
in
depreciation
the
amount
it
considers
to
be
appropriate in relation to
the estimated losses on its
owned portfolio.
Intangible
assets
-
Intangible
assets
are
measured
based
on
the
cost
model
and
carried
at
their
cost
less
accumulated
amortization and impairment
losses.
The
estimated
useful
lives
and
the
amortization
method
of
intangible
assets
are
reviewed
annually
at
each
fiscal year end, and adopted prospectively,
if appropriate.
(1) Capitalized development cost
Development
expenditure
for
a
product
is
capitalized
only
when
there
is
a
technical
and
commercial
feasibility
of
completing
the
development,
Toyota
has
the
intention,
ability
and
sufficient
resources
to
use
the
outcome of
the
development,
it is
probable
that
the outcome
will
generate
a future
economic
benefit, and
the cost
can be measured reliably.
Capitalized
development
cost
is
amortized
using
the
straight-line
method
over
the
expected
product
life
cycle of the developed product ranging
mainly from 5 to 10 years.
(2) Other intangible assets
Other
intangible
assets
mainly
consist
of
software
for
internal
use
and
amortized
using
the
straight-line
method
over
their
estimated
useful
lives,
mainly
5
years.
Goodwill
is
not
material
to
Toyota’s
consolidated
statement of financial
position.
Impairment
of
non-financial
assets
-
At
the
end
of
the
reporting
period,
the
carrying
amount
of
non-financial
assets
other
than
inventories
and
deferred tax
assets are
assessed
to determine
whether
or not there
is
any indication
of impairment.
If
there is such
an indication,
the recoverable
amount of
such
an
asset
or
a
cash-generating
unit
is
estimated.
An impairment
loss
would
be
recognized
when
the
carrying
amount
of
an
asset
or
a
cash-generating
unit
exceeds
the
estimated
discounted
cash
flows
expected
to
result
from
the
use
of
the
assets
and
its
eventual
disposition.
The
amount
of
the
impairment
loss
to
be
recorded
is
calculated
by
the
excess
of
the
carrying
amount
of
the
assets
over
its
recoverable amount.
Leases
-
At the inception of a contract, Toyota
assesses whether the contract is,
or contains, a lease.
(1) Lessee
Toyota
recognizes
a
right
of
use
asset
and
a
lease
liability
at
the
lease
commencement
date.
The
cost
of
the
right of use asset
is measured
at the amount
of the initial
measurement of the
lease liability by adjusting
any lease
payments
made
or before
the
commencement
date. Lease
liability
is
initially
measured
at
the present
value
of
the
lease payments that are not paid
as of the commencement date.
F-19
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
After
the
commencement
date,
Toyota
applies
a
cost
model
and
subsequently
depreciates
the
right
of
use
asset
using
a
straight-line
method
from
the
commencement
date
to
the
earlier
of
the
end
of
the
useful
life
of
the
right
of
use
asset
or
the
end
of
the
lease
term.
Lease
liability
is
measured
at
amortized
cost
using
the
effective
interest
method.
In
the
consolidated
statement
of
financial
position,
lease
liability
is
included
in
short-term
and
long-term
debt.
Interest
on
the
lease
liability
in
each
period
during
the
lease
term
is
the
amount
that
produces
a
constant
periodic
rate
of
interest
on
the
remaining
balance
of
the
lease
liability
and
recognized
in
profit
or
loss
over the lease term.
Many
lease
contracts
relating
to
land
and
buildings
entered
into
by
Toyota
include
extension
options
that
can
be
exercisable
by
Toyota
as
lessee
for
various
purposes,
such
as
to
ensure
business
flexibility.
Toyota
assesses
whether
it
is
reasonably
certain
to
exercise
an
extension
option,
and
if
it
assesses
it
to
be
reasonably
certain, the extension option is
included in the lease term.
Toyota
recognizes
the
lease
payments
associated
with
lease
terms
of
12
months
or
less
as
an
expense
on
a
straight-line basis over
the lease term.
(2) Lessor
With respect
to
lessor
lease
transactions,
Toyota determines
at
the commencement
of
the lease
whether each
lease is a finance lease or operating
lease.
A
lease
is
classified
as
a
finance
lease
if
it
transfers
substantially
all
of
the
risks
and
rewards
incidental
to
the ownership of an underlying asset. Otherwise
leases are classified
as operating leases.
Toyota recognizes the operating lease
payments in profit or loss
on a straight-line basis over
the lease term.
Employee
benefit
obligations
-
Toyota has both defined benefit and defined
contribution plans for employees’
retirement benefits.
(1) Defined benefit plan
The
present
value
of
defined
benefit
obligations
and
service
cost
are
principally
determined
for
each
plan
using
the
projected
unit
credit
method.
The
net
defined
benefit
liability
(asset)
is
the
present
value
of
the
defined
benefit
obligations
less
the
fair
value
of
plan
assets.
Current
service
cost
and
net
interest
on
the
net
defined
benefit liability (asset)
are recognized as net income
(loss) on the statement
of net income.
Past service cost is recognized
in profit or loss upon occurrence.
Toyota
recognizes
the
difference
arising
from
remeasurement
of
the
net
defined
benefit
liability
(asset)
including
actuarial
gains
and
losses
in
other
comprehensive
income
when
it
is
incurred
and
reclassifies
it
immediately to retained
earnings.
(2) Defined contribution plan
For
defined
contribution
plans,
when
the
employees
render
services,
the
contribution
payables
are
recognized in profit or loss.
F-20
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Liabilities
for
quality
assurance
-
Toyota
generally
warrants
its
products
against
certain
manufacturing
and
other
defects.
Provisions
for
product warranties
are provided
for
specific periods
of time
and/or usage of
the product and
vary depending upon
the
nature
of
the
product,
the
geographic
location
of
the
sale
and
other
factors.
The
accrued
warranty
costs
represent
management’s
best
estimate
at
the
time
of
sale
of
the
total
costs
that
Toyota
will
incur
to
repair
or
replace
product
parts
that
fail
while
still
under
warranty.
The
amount
of
accrued
estimated
warranty
costs
is
primarily
based
on
historical
experience
of
product
failures
as
well
as
current
information
on
repair
costs.
An
estimate
of
warranty
claim
accrued
for
each
fiscal
year
is
calculated
based
on
the
estimate
of
warranty
claim
per
unit.
The
estimate
of
warranty
claim
per
unit
is
calculated
comprehensively
by
dividing
the
actual
amounts
of
warranty claim by the number of sales
units for the fiscal
year.
Toyota
accrues
for
costs
of
recalls
and
other
safety
measures,
as
well
as
product
warranty
cost
described
above.
Toyota
generally
measures
such
“liabilities
for
recalls
and
other
safety
measures”
at
the
time
of
vehicle
sales
comprehensively
by
aggregate
sales
of
various
models
in
a
certain
period
by
geographical
regions.
However,
when
circumstances
warrant,
Toyota
measures
“liabilities
for
a
particular
recall
or
other
safety
measure” using an individual model
when they are probable and reasonably estimable.
The
portion
of
“liabilities
for
recalls
and
other
safety
measures”
recorded
in
the
consolidated
statement
of
financial
position
is
calculated
comprehensively
based
on
the
“expected
liability
for
the
cost
of
recalls
and
other
safety
measures”
in
consideration
of
the
“accumulated
amount
of
repair
cost
paid”.
As
such,
this
liability
is
evaluated
every
period
based
on
new
data
and
are
adjusted
as
appropriate.
Toyota
calculates
these
liabilities
for
units
sold
in
the
current
period
and
each
of
the
past
10 fiscal
years,
and
aggregates
such
liabilities
in
determining
the final liability amount.
The
“expected
liability
for
the
cost
of
recalls
and
other
safety
measures”
are
calculated
by
multiplying
the
“sales
unit”
by
the
“expected
average
repair
cost
per
unit”.
The
“expected
average
repair
cost
per
unit”
is
calculated
based
on
dividing
the
“accumulated
amount
of
repair
cost
paid
per
unit”
by
the
“pattern
of
payment
occurrences”.
The
“pattern
of
payment
occurrence”
represents
a
ratio
that
shows
the
measure
of
payment
occurrence over 10 years based on actual
payments with regard to units sold
within 10 years.
Factors that
may cause
a difference
between
the amount
accrued comprehensively
at
the time of
vehicle sale
and
actual
payment
on
individual
recalls
and
other
safety
measures
mainly
include
actual
cost
of
recalls
and
safety
measures
during
the
period
being
significantly
different
from
the
accumulated
amount
of
repair
cost
paid
per
unit
(generally
comprised
of
parts
and
labor)
and
the
actual
pattern
of
payment
occurrence
during
the
period
being
significantly
different
from
the
pattern
of
the
payment
occurrence
in
the
past.
Such
differences
are
considered as part of our estimation
process for future recalls
and other safety measures.
Liabilities
for
product
warranties
and
liabilities
for
recalls
and
other
safety
measures
have
been
combined
into
“Liabilities
for
quality
assurance”
in
the
consolidated
statement
of
financial
position.
Product
warranty
costs
and
costs
of
recalls
and
other
safety
measures
are
included
in
cost
of
products
sold
in
the
consolidated
statement
of income.
The
foregoing
evaluations
are
inherently
uncertain,
as
they
require
material
estimates
as
described
above.
Consequently,
actual
warranty
costs
may
differ
from
the
estimated
amounts
and
could
require
additional
warranty
provisions.
If
these
factors
require
a
significant
increase
in
Toyota’s
accrued
estimated
warranty
costs,
it would negatively affect future
operating results of the
automotive operations.
F-21
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Revenue
recognition
-
In
the
automotive
operations,
performance
obligations
are
considered
to
be
satisfied
when
completed
vehicles
and
parts
are
delivered
to
the
agreed
locations
with
dealers.
For
parts
for
production,
it
is
when
they
are
loaded
on
a
ship
or
delivered
to
manufacturing
companies.
We
do
not
have
any
material
significant
payment
terms as payment is received
at or shortly after the point
of sale.
Toyota’s
sales
incentive
programs
principally
consist
of
cash
payments
to
dealers
calculated
based
on
total
vehicle
volume
or
vehicle
unit
sales
of
certain
models
sold
by
a
dealer
during
a
certain
period
of
time.
Toyota
accrues
these
incentives
as
revenue
reductions
upon
the
sale
of
a
vehicle
corresponding
to
the
program
by
the
amount determined in the related
incentive program utilizing
the most likely outcome
method.
The
sale
of
certain
vehicles
includes
a
contractual
right,
which
entitles
customers
to
free
vehicle
maintenance.
We
use
an
observable
price
to
determine
the
stand-alone
selling
price
for
separate
performance
obligations
or
a
cost
plus
margin
approach
when
one
is
not
available.
Such
revenues
from
free
maintenance
contracts
are
deferred
and
recognized
as
revenue
over
the
period
of
the
contract
in
proportion
to
the
costs
expected to be incurred in satisfying
the obligations under the contract.
Revenues from
the
sales
of vehicles
under
which Toyota
conditionally
guarantees
the
minimum resale
value
are
recognized
on
a
pro
rata
basis
from
the
date
of
sale
to
the
first
exercise
date
of
the
guarantee
in
accordance
with
lease
accounting.
The
underlying
vehicles
of
these
transactions
are
recorded
as
assets
and
are
depreciated
in
accordance with Toyota’s depreciation
policy.
Interest
income
from
financial
services
is
recognized
using
the
effective
interest
method.
Revenues
from
operating leases are recognized
on a straight-line basis over
the lease term.
If
the
period
between
satisfaction
of
the
performance
obligation
and
receipt
of
consideration
is
expected
to
be within one year
or less, as a practical
expedient, we do not adjust the promised
amount of consideration
for the
effects of a significant
financing component.
Revenue is recognized
net of any taxes collected
from customers and subsequently
remitted to governmental
authorities.
Income
taxes
-
Income tax expenses are presented
as the aggregate amount of current
taxes and deferred taxes.
Deferred
tax
assets
and
deferred
tax
liabilities
are
recognized
for
future
tax
consequences
attributable
to
temporary
differences
between
the
carrying
amount
of
assets
or
liabilities
in
the
consolidated
statement
of
financial
position
and
the
tax
base
of
the
assets
or
liabilities
and
carryforwards
of
unused
tax
losses
and
tax
credits.
Deferred
tax
assets
are
recognized
for
all
future
deductible
amounts,
to
the
extent
that
it
is
probable
that
we
will have sufficient profit
to utilize the benefit of
future deductible amounts.
Deferred
tax
liabilities
for
deductible
temporary
differences
arising
from
investments
in
subsidiaries,
associates,
and
interest
in
joint
ventures
are
recognized
in
principle.
However,
they
are
not
recognized
when
Toyota
is
able
to
control
the
timing
of
the
reversal
of
the
temporary
difference
and
it
is
probable
that
the
temporary difference will
not reverse in the foreseeable
future.
F-22
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Deferred
tax
assets
and
deferred
tax
liabilities
are
measured
at
the
tax
rates
that
are
expected
to
apply
in
the
period
when
the
assets
are
realized
or
the
liabilities
are
settled,
based
on
the
tax
rates
and
tax
laws
enacted
or
substantively
enacted
at
the
end
of
the reporting
period.
The
measurement
of
deferred
tax
assets
and
deferred
tax
liabilities
reflects the
tax consequences
that would follow
from the manner
in which Toyota
expects, at the
end of
reporting period, to recover or
settle the carrying amount of
its assets and liabilities.
Earnings
per
share
attributable
to
Toyota
Motor
Corporation
-
Basic
earnings
per
share
attributable
to
Toyota
Motor
Corporation
is
calculated
by
dividing
net
income
attributable
to
Toyota
Motor
Corporation
by
the
weighted-average
number
of
common
shares
outstanding
with
adjustment for
treasury
stock during
the reporting
period.
Diluted earnings
per share
attributable to
Toyota Motor
Corporation
is
calculated
by
dividing
net
income
attributable
to
Toyota
Motor
Corporation
by
the
weighted-
average number of common shares outstanding
taking into consideration
the effect of dilutive
securities.
New
accounting
standards
and
interpretations
not
yet
adopted
-
None
of
new
or
revised
standards
and
interpretations
that
have
been
issued
as
of
the
date
of
approval
of
the
consolidated
financial
statements
but
have
not
yet
been
adopted
by
Toyota
have
a
significant
effect
on
the
consolidated financial statements.
4.
Significant
accounting
judgments
and
estimates
The
preparation
of
the
consolidated
financial
statements
in
conformity
with
IFRS
requires
management
to
make
judgments,
estimates,
and
assumptions
that
affect
the
application
of
accounting
policies,
the
reported
amounts
of
assets,
liabilities,
revenues
and
expenses,
and
the
disclosure
of
contingent
assets
and
liabilities.
Actual
results
could
differ
from
these
estimates.
These
estimates
and
underlying
assumptions
are
reviewed
on
a
continuous basis.
Changes
in these
accounting
estimates
are
recognized
in
the period
in
which the estimates
were
revised and in any future periods affected.
Information
about
important
estimation
and
judgments
that
have
significant
effects
on
the
amounts
recognized in the consolidated financial
statements is
as follows:
Scope of subsidiaries, associates,
and joint ventures (Note 3 “Basis of consolidation”)
Intangible assets incurred
by research and development (Note 3 “Intangible
assets”)
Information
about
accounting
estimates
and
assumption
that
affect
the
application
of
accounting
policies
and the reported amounts of assets
and liabilities, and financial
statements based on IFRS is as
follows:
Liabilities for quality
assurance (Note 3 “Liabilities
for quality assurance” and Note 24)
Allowance
for
credit
losses
on
finance
receivables
(Note
3
“Allowance
for
credit
losses
on
finance
receivables” and Note 19 (2))
Impairment of non-financial
assets (Note 3 “Impairment
of non-financial assets”
and Note 12)
Employee benefit obligations (Note
3 “Employee benefit obligations”
and Note 23)
Fair value measurements (Note
21)
Recoverability of deferred tax
assets (Note 3 “Income taxes” and Note
15)
F-23
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
5.
Segment
information
(1)
Outline
of
reporting
segments
The operating
segments
reported below
are
the
segments
of
Toyota
for which
separate
financial
information
is
available
and
for
which
operating
income/loss
amounts
are
evaluated
regularly
by
executive
management
in
deciding how to allocate resources and
in assessing performance.
The
major
portions
of
Toyota’s
operations
on
a
worldwide
basis
are
derived
from
the
Automotive
and
Financial
services
business
segments.
The
Automotive
segment
designs,
manufactures
and
distributes
sedans,
minivans,
compact
cars,
SUVs,
trucks
and
related
parts
and
accessories.
The
Financial
services
segment
consists
primarily
of
financing
and
vehicle
leasing
operations
to
assist
in
the
merchandising
of
Toyota’s
products
as
well
as other products. The All other segment
includes telecommunications
and other businesses.
(2)
Segment
information
As of and for the year ended March 31, 2020
Yen
in
millions
Automotive
Financial
services
All
other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from external customers
.....
26,770,379
2,172,854
923,314
29,866,547
Inter-segment revenues and transfers
. . .
29,364
20,316
581,606
(631,286)
Total
........................
26,799,743
2,193,170
1,504,920
(631,286)
29,866,547
Operating expenses
.....................
24,786,609
1,909,429
1,401,564
(630,287)
27,467,315
Operating income
......................
2,013,134
283,742
103,356
(999)
2,399,232
Total assets
...........................
19,450,102
25,390,541
2,119,951
7,011,769
53,972,363
Investments accounted for using
the equity
method
.............................
3,810,310
65,471
283,355
138,428
4,297,564
Depreciation and amortization
............
821,958
739,484
33,905
1,595,347
Capital expenditures
....................
1,437,932
2,061,334
68,363
14,818
3,582,448
F-24
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
As of and for the year ended March 31, 2021
Yen
in
millions
Automotive
Financial
services
All
other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from external customers
.....
24,597,846
2,137,195
479,553
27,214,594
Inter-segment revenues and transfers
. . .
53,706
25,042
572,812
(651,560)
Total
........................
24,651,552
2,162,237
1,052,365
(651,560)
27,214,594
Operating expenses
.....................
23,044,391
1,666,645
967,015
(661,205)
25,016,845
Operating income
......................
1,607,161
495,593
85,350
9,645
2,197,748
Total assets
...........................
21,412,034
28,275,239
2,720,720
9,859,147
62,267,140
Investments accounted for using
the equity
method
.............................
3,698,990
71,336
248,814
141,664
4,160,803
Depreciation and amortization
............
893,704
715,757
34,829
1,644,290
Capital expenditures
....................
1,341,032
2,151,455
76,370
40,843
3,609,699
As of and for the year ended March 31, 2022
Yen
in
millions
Automotive
Financial
services
All
other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from external customers
.....
28,531,993
2,306,079
541,436
31,379,507
Inter-segment revenues and transfers
. . .
73,745
17,947
588,441
(680,133)
Total
........................
28,605,738
2,324,026
1,129,876
(680,133)
31,379,507
Operating expenses
.....................
26,321,448
1,667,025
1,087,575
(692,237)
28,383,811
Operating income
......................
2,284,290
657,001
42,302
12,104
2,995,697
Total assets
...........................
24,341,737
31,681,472
3,091,011
8,574,551
67,688,771
Investments accounted for using
the equity
method
.............................
4,354,085
79,414
258,750
145,646
4,837,895
Depreciation and amortization
............
1,026,834
761,801
33,245
1,821,880
Capital expenditures
....................
1,422,429
2,156,339
51,200
(18,381)
3,611,587
Accounting
policies
applied
by
each
segment
is
in
conformity
with
those
of
Toyota’s
consolidated
financial
statements.
Transfers
between
industry
segments
are
made
in
accordance
with
terms
and
conditions
in
the
ordinary course of business.
Unallocated
amounts
included
in
assets
represent
assets
held
for
corporate
purpose,
which mainly
consist
of
cash
and
cash
equivalents
and
financial
assets
measured
at
fair
value
through
other
comprehensive
income,
and
the
balances
as
of
March
31,
2020,
2021
and
2022
are
¥8,584,459
million,
¥11,344,879
million
and
¥10,020,460 million, respectively.
F-25
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(3)
Consolidated
Financial
Statements
on
Non-Financial
Services
Businesses
and
Financial
Services
Business
The
financial
data
below
presents
separately
Toyota’s
non-financial
services
and
financial
services
businesses.
(i)
Consolidated
Statement
of
Financial
Position
on
Non-Financial
Services
Businesses
and
Financial
Services Business
Yen
in
millions
March
31,
2021
March
31,
2022
Assets
(Non-Financial Services Businesses)
Current assets
Cash and cash equivalents
................................
3,274,149
4,299,522
Trade accounts and other receivable
.........................
3,063,314
3,184,782
Other financial assets
....................................
3,778,119
2,028,649
Inventories
............................................
2,888,028
3,821,356
Other current assets
......................................
664,097
746,134
Total current assets
......................................
13,667,707
14,080,444
Non-current assets
Property, plant and equipment
.............................
6,805,166
7,302,017
Other
.................................................
14,721,626
15,769,015
Total non-current assets
..................................
21,526,792
23,071,032
Total assets
................................................
35,194,499
37,151,476
(Financial Services Business)
Current assets
Cash and cash equivalents
................................
1,826,707
1,814,133
Trade accounts and other receivable
.........................
216,767
206,588
Receivables related to financial
services
.....................
6,756,189
7,181,327
Other financial assets
....................................
1,021,738
1,058,620
Other current assets
......................................
198,068
221,738
Total current assets
......................................
10,019,469
10,482,407
Non-current assets
Receivables related to financial
services
.....................
12,449,525
14,583,130
Property, plant and equipment
.............................
4,605,988
5,024,625
Other
.................................................
1,200,256
1,591,311
Total non-current assets
..................................
18,255,770
21,199,065
Total assets
................................................
28,275,239
31,681,472
(Elimination)
Elimination of assets
.........................................
(1,202,599)
(1,144,177)
(Consolidated)
Total assets
................................................
62,267,140
67,688,771
Note: Assets in non-financial services
include unallocated corporate
assets.
F-26
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2021
March
31,
2022
Liabilities
(Non-Financial Services Businesses)
Current liabilities
Trade accounts and other payables
..........................
3,801,753
4,023,857
Short-term and current portion
of long-term debt
..............
2,348,514
1,041,557
Accrued expenses
.......................................
1,322,353
1,421,194
Income taxes payable
....................................
262,727
695,888
Other current liabilities
...................................
2,650,433
2,778,172
Total current liabilities
...................................
10,385,779
9,960,668
Non-current liabilities
Long-term debt
.........................................
1,523,134
1,538,884
Retirement benefit liabilities
...............................
1,015,156
1,004,558
Other non-current liabilities
...............................
1,509,535
1,830,146
Total non-current liabilities
...............................
4,047,825
4,373,588
Total liabilities
.............................................
14,433,605
14,334,256
(Financial Services Business)
Current liabilities
Trade accounts and other payables
..........................
510,670
477,550
Short-term and current portion
of long-term debt
..............
10,286,251
10,576,910
Accrued expenses
.......................................
102,200
124,088
Income taxes payable
....................................
88,153
130,927
Other current liabilities
...................................
1,002,615
1,414,606
Total current liabilities
...................................
11,989,889
12,724,080
Non-current liabilities
Long-term debt
.........................................
12,044,994
13,882,650
Retirement benefit liabilities
...............................
19,940
18,190
Other non-current liabilities
...............................
696,294
722,257
Total non-current liabilities
...............................
12,761,228
14,623,097
Total liabilities
.............................................
24,751,117
27,347,177
(Elimination)
Elimination of liabilities
......................................
(1,205,911)
(1,147,482)
(Consolidated)
Total liabilities
.............................................
37,978,811
40,533,951
Shareholders’ equity
(Consolidated) Total Toyota Motor Corporation
shareholders’ equity
......
23,404,547
26,245,969
(Consolidated) Non-controlling interests
.............................
883,782
908,851
(Consolidated) Total shareholders’
equity
............................
24,288,329
27,154,820
(Consolidated) Total liabilities
and shareholders’ equity
.................
62,267,140
67,688,771
F-27
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(ii)
Consolidated
Statement
of
Income
on
Non-Financial
Services
Businesses
and
Financial
Services
Business
Yen
in
millions
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
(Non-Financial Services Businesses)
Sales revenues
..............................
27,710,128
25,103,190
29,104,564
Cost of revenues
............................
23,104,047
21,199,915
24,250,860
Selling, general and administrative
..............
2,492,039
2,206,205
2,518,182
Operating income
............................
2,114,042
1,697,070
2,335,522
Other income (loss), net
.......................
394,278
742,785
998,001
Income before income taxes
...................
2,508,319
2,439,855
3,333,522
Income tax expense
..........................
615,546
528,413
944,594
Net income
.................................
1,892,774
1,911,442
2,388,928
Net income attributable to
Toyota Motor Corporation
.................
1,818,022
1,875,467
2,369,399
Non-controlling interests
..................
74,752
35,975
19,529
(Financial Services Business)
Sales revenues
..............................
2,193,170
2,162,237
2,324,026
Cost of revenues
............................
1,397,344
1,202,277
1,178,509
Selling, general and administrative
..............
512,085
464,368
488,517
Operating income
............................
283,742
495,593
657,001
Other income (loss), net
.......................
8
3
5
(3,090)
16
Income before income taxes
...................
284,577
492,503
657,017
Income tax expense
..........................
66,284
121,536
171,327
Net income
.................................
218,293
370,967
485,690
Net income attributable to
Toyota Motor Corporation
.................
218,060
369,824
480,716
Non-controlling interests
..................
2
3
3
1,143
4,974
(Elimination)
Elimination of net income
.....................
5
9
(30)
(4)
(Consolidated)
Net income
.................................
2,111,125
2,282,378
2,874,614
Net income attributable to
Toyota Motor Corporation
.................
2,036,140
2,245,261
2,850,110
Non-controlling interests
..................
74,985
37,118
24,504
F-28
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(iii)
Consolidated
Statement
of
Cash
Flows
on
Non-Financial
Services
Businesses
and
Financial
Services
Business
Yen
in
millions
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
(Non-Financial Services Businesses)
Cash flows from operating activities
Net income
.....................................
1,892,774
1,911,442
2,388,928
Depreciation and amortization
......................
855,863
928,533
1,060,079
Share of profit (loss) of investments accounted for using
the equity method
..............................
(298,494)
(345,374)
(552,515)
Income tax expense
...............................
615,546
528,413
944,594
Changes in operating assets and liabilities, and other
....
(154,164)
(262,407)
(572,082)
Interest received
.................................
141,975
123,606
100,118
Dividends received
...............................
316,610
290,618
342,646
Interest paid
....................................
(46,217)
(35,371)
(40,780)
Income taxes paid, net of refunds
....................
(700,528)
(505,260)
(544,887)
Net cash provided by (used in) operating activities
......
2,623,364
2,634,200
3,126,101
Cash flows from investing activities
Additions to fixed assets excluding equipment leased to
others
........................................
(1,222,821)
(1,203,662)
(1,186,900)
Additions to equipment leased to others
...............
(163,592)
(142,217)
(151,456)
Proceeds from sales of fixed assets excluding equipment
leased to others
................................
46,765
38,575
36,219
Proceeds from sales of equipment leased to others
......
49,892
46,461
45,183
Additions to intangible assets
.......................
(299,253)
(271,274)
(335,436)
Additions to public and corporate bonds and stocks
.....
(2,220,217)
(2,511,346)
(1,904,588)
Proceeds from sales of public and corporate bonds and
stocks and upon maturity of public and corporate
bonds
........................................
2,249,367
1,982,302
1,989,345
Other, net
......................................
(95,852)
(1,339,372)
1,856,069
Net cash provided by (used in) investing activities
......
(1,655,711)
(3,400,534)
348,436
Cash flows from financing activities
Increase (decrease) in short-term debt
................
45,288
213,716
(164,899)
Proceeds from long-term debt
......................
247,048
1,662,593
513,371
Payments of long-term debt
........................
(163,486)
(170,373)
(1,818,653)
Dividends paid to Toyota Motor Corporation common
shareholders
..................................
(618,801)
(625,514)
(709,872)
Dividends paid to non-controlling interests
............
(50,903)
(34,840)
(49,629)
Reissuance (repurchase) of treasury stock
.............
(476,128)
199,884
(404,718)
Net cash provided by (used in) financing activities
......
(1,016,982)
1,245,465
(2,634,401)
Effect of exchange rate changes on cash and cash
equivalents
.......................................
(86,553)
112,588
185,237
Net increase (decrease) in cash and cash equivalents
.........
(135,882)
591,719
1,025,373
Cash and cash equivalents at beginning of year
.............
2,818,313
2,682,431
3,274,149
Cash and cash equivalents at end of year
..................
2,682,431
3,274,149
4,299,522
F-29
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
For
the
year
ended
March
31,
2020
For
the
year
ended
March
31,
2021
For
the
year
ended
March
31,
2022
(Financial Services Business)
Cash flows from operating activities
Net income
.....................................
218,293
370,967
485,690
Depreciation and amortization
......................
739,484
715,757
761,801
Interest income and interest costs related to financial
services, net
...................................
(200,727)
(241,016)
(360,837)
Share of profit (loss) of investments accounted for using
the equity method
..............................
(11,753)
(5,655)
(7,831)
Income tax expense
...............................
66,284
121,536
171,327
Changes in operating assets and liabilities, and other
....
(1,081,707)
(780,798)
(623,051)
Interest received
.................................
664,167
661,272
742,364
Dividends received
...............................
1,799
3,901
4,740
Interest paid
....................................
(467,774)
(431,939)
(384,006)
Income taxes paid, net of refunds
....................
(76,994)
(304,856)
(264,876)
Net cash provided by (used in) operating activities
......
(148,928)
109,168
525,321
Cash flows from investing activities
Additions to fixed assets excluding equipment leased to
others
........................................
(23,472)
(10,240)
(10,366)
Additions to equipment leased to others
...............
(2,031,699)
(2,133,378)
(2,135,437)
Proceeds from sales of fixed assets excluding equipment
leased to others
................................
1,184
1,967
1,530
Proceeds from sales of equipment leased to others
......
1,341,301
1,325,238
1,496,949
Additions to intangible assets
.......................
(5,739)
(7,173)
(10,650)
Additions to public and corporate bonds and stocks
.....
(185,120)
(217,825)
(523,323)
Proceeds from sales of public and corporate bonds and
stocks and upon maturity of public and corporate
bonds
........................................
126,281
79,616
213,291
Other, net
......................................
(22,213)
(35,893)
113,635
Net cash provided by (used in) investing activities
......
(799,477)
(997,688)
(854,370)
Cash flows from financing activities
Increase (decrease) in short-term debt
................
514,196
(1,517,259)
(488,495)
Proceeds from long-term debt
......................
5,458,616
8,043,141
7,800,854
Payments of long-term debt
........................
(4,334,374)
(5,332,573)
(7,142,750)
Dividends paid to non-controlling interests
............
(4,052)
(1,757)
(2,094)
Net cash provided by (used in) financing activities
......
1,634,387
1,191,551
167,516
Effect of exchange rate changes on cash and cash
equivalents
.......................................
(54,454)
107,657
148,958
Net increase (decrease) in cash and cash equivalents
.........
631,527
410,688
(12,575)
Cash and cash equivalents at beginning of year
.............
784,492
1,416,020
1,826,707
Cash and cash equivalents at end of year
..................
1,416,020
1,826,707
1,814,133
(Consolidated)
Effect of exchange rate changes on cash and cash
equivalents
.......................................
(141,007)
220,245
334,195
Net increase (decrease) in cash and cash equivalents
.........
495,645
1,002,406
1,012,798
Cash and cash equivalents at beginning of year
.............
3,602,805
4,098,450
5,100,857
Cash and cash equivalents at end of year
..................
4,098,450
5,100,857
6,113,655
F-30
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(4)
Geographic
information
As of and for the year ended March 31, 2020
Yen
in
millions
Japan
North
America
Europe
Asia
Other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from
external
customers
........
9,503,238
10,419,869
3,133,227
4,785,489
2,024,724
29,866,547
Inter-segment
revenues and
transfers
.........
6,938,614
222,165
222,130
507,741
89,387
(7,980,038)
Total
.........
16,441,852
10,642,034
3,355,357
5,293,231
2,114,111
(7,980,038)
29,866,547
Operating expenses
......
14,856,576
10,388,830
3,211,540
4,929,684
2,030,110
(7,949,425)
27,467,315
Operating income
.......
1,585,276
253,205
143,817
363,547
84,001
(30,613)
2,399,232
Total assets
............
18,221,453
18,579,078
4,264,022
5,307,513
2,881,536
4,718,761
53,972,363
Non-current assets
.......
4,697,388
5,517,466
570,563
708,066
428,707
11,922,190
As of and for the year ended March 31, 2021
Yen
in
millions
Japan
North
America
Europe
Asia
Other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from
external
customers
........
8,587,193
9,325,950
2,968,289
4,555,897
1,777,266
27,214,594
Inter-segment
revenues and
transfers
.........
6,361,739
165,853
166,200
489,398
95,630
(7,278,820)
Total
.........
14,948,931
9,491,803
3,134,489
5,045,295
1,872,895
(7,278,820) 27,214,594
Operating expenses
......
13,799,715
9,090,442
3,026,518
4,609,354
1,813,048
(7,322,232)
25,016,845
Operating income
.......
1,149,217
401,361
107,971
435,940
59,847
43,413
2,197,748
Total assets
............
19,674,666
20,138,715
5,074,409
6,548,343
3,469,635
7,361,372
62,267,140
Non-current assets
.......
5,232,862
5,705,770
751,245
896,542
461,723
13,048,143
F-31
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
As of and for the year ended March 31, 2022
Yen
in
millions
Japan
North
America
Europe
Asia
Other
Inter-segment
Elimination/
Unallocated
Amount
Consolidated
Sales revenues
Revenues from
external
customers
.......
8,214,740
10,897,946
3,692,214
5,778,115
2,796,493
31,379,507
Inter-segment
revenues and
transfers
........
7,776,696
268,534
175,633
752,452
131,690
(9,105,004)
Total
.........
15,991,436
11,166,479
3,867,847
6,530,566
2,928,183
(9,105,004) 31,379,507
Operating expenses
.....
14,567,991
10,600,695
3,704,874
5,858,216
2,690,014
(9,037,980) 28,383,811
Operating income
......
1,423,445
565,784
162,973
672,350
238,169
(67,024)
2,995,697
Total assets
...........
21,502,155
23,353,812
5,711,271
7,461,812
4,309,248
5,350,474
67,688,771
Non-current assets
......
5,501,046
6,251,499
891,146
977,235
537,631
14,158,559
“Other” consists of Central and South America,
Oceania, Africa and the Middle East.
Non-current
assets
do
not
include
financial
instruments,
deferred
tax
assets,
net
defined
benefit
assets
and
rights arising under insurance
contracts.
The
above
amounts
are
aggregated
by
region
based
on
the
location
of
the
country
where
TMC
or
consolidated
subsidiaries
are located.
Transfers
between
geographic areas
are
made in
accordance with
terms and
conditions in the ordinary course
of business.
Unallocated
amounts
included
in
assets
represent
assets
held
for
corporate
purpose,
which mainly
consist
of
cash
and
cash
equivalents
and
financial
assets
measured
at
fair
value
through
other
comprehensive
income,
and
the
balances
as
March
31,
2020,
2021
and
2022
are
¥8,584,459
million,
¥11,344,879
million
and
¥10,020,460 million, respectively.
(5)
Sales
revenues
by
location
of
external
customers
In
addition
to
the
disclosure
requirements
under
IFRS,
Toyota
discloses
this
information
in
order
to
provide
financial statements users
with valuable information
.
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Japan
..................................................
7,229,849
6,820,590
6,425,184
North America
...........................................
10,546,655
9,437,314
10,953,472
Europe
.................................................
2,932,324
2,734,152
3,495,785
Asia
...................................................
5,217,857
5,057,397
6,017,646
Other
..................................................
3,939,863
3,165,141
4,487,420
Total
..............................................
29,866,547
27,214,594
31,379,507
“Other” consists of Central and South America,
Oceania, Africa and the Middle East,
etc.
F-32
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
6.
Cash
and
cash
equivalents
Cash and cash equivalents consist of the
following:
Yen
in
millions
March
31,
2021
2022
Cash and deposits
......................................................
3,346,401
4,630,882
Negotiable certificate of
deposit and other
...................................
1,754,456
1,482,773
Total
............................................................
5,100,857
6,113,655
7.
Trade
accounts
and
other
receivables
Trade accounts and other receivables
consist of the following:
Yen
in
millions
March
31,
2021
2022
Accounts and notes receivables
............................................
2,301,976
2,466,398
Other receivables
.......................................................
688,352
716,558
Allowance for doubtful accounts
..........................................
(31,586)
(40,124)
Total
............................................................
2,958,742
3,142,832
Trade
accounts
and
other
receivables
which
are
unconditional
rights
to
considerations
are
classified
as
financial assets measured
at amortized cost.
The changes in the allowance for doubtful
accounts consist of the following:
Yen
in
millions
For
the
years
ended
March
31,
2021
2022
Allowance for doubtful accounts at beginning
of year
..........................
90,266
97,378
Provision for doubtful accounts, net
of reversal
...............................
7,780
10,649
Write-offs
............................................................
(3,112)
(1,239)
Other
................................................................
2,444
4,005
Allowance for doubtful accounts at end of
year
...............................
97,378
110,793
“Other” includes currency translation
adjustments.
A
portion
of
the
allowance
for
doubtful
accounts
is
attributed
to
certain
non-current
receivable
balances
which are reported as other financial
assets under non-current
assets.
F-33
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
8.
Finance
receivables
Finance receivables consist of
the following:
Yen
in
millions
March
31,
2021
2022
Retail
................................................................
15,048,433
17,647,440
Finance leases
.........................................................
2,031,280
2,347,941
Wholesale and other dealer loans
..........................................
3,185,484
2,904,216
Total
............................................................
20,265,197
22,899,597
Deferred origination costs
................................................
270,406
328,792
Less - Unearned income
.................................................
(1,068,587)
(1,172,007)
Less - Allowance for credit losses
Retail
............................................................
(198,204)
(230,104)
Finance leases
.....................................................
(33,455)
(36,985)
Wholesale and other dealer loans
......................................
(29,642)
(24,836)
Total finance receivables, net
.............................................
19,205,715
21,764,457
Current assets
.........................................................
6,756,189
7,181,327
Non-current assets
......................................................
12,449,525
14,583,130
Total finance receivables, net
.............................................
19,205,715
21,764,457
Finance
receivables
were
geographically
distributed
as
follows:
in
North
America
54.6%,
in
Europe
13.2%,
in Asia
13.5%,
in
Japan
8.3%
and
in Other
10.4%
as
of
March 31,
2021,
and in
North
America 55.0%,
in
Europe
13.3%, in Asia 12.9%, in Japan 7.3% and in Other 11.5% as of
March 31, 2022.
Finance receivables are classified
as financial assets
measured at amortized cost.
The
contractual
maturity
of
retail
receivables,
future
lease
payments
for
finance
leases
receivables,
wholesale receivables and other dealer
loans are as follows:
Yen
in
millions
March
31,
2021
Retail
Finance
leases
Wholesale
and
other
dealer
loans
Within 1 year
.........................................
4,196,724
540,759
1,995,544
Between 1 and 2 years
..................................
3,482,932
415,673
348,787
Between 2 and 3 years
..................................
2,906,322
303,166
231,969
Between 3 and 4 years
..................................
2,235,116
171,142
137,331
Between 4 and 5 years
..................................
1,404,273
69,241
145,817
Later than 5 years
......................................
823,066
11,597
326,037
Total
............................................
15,048,433
1,511,577
3,185,484
F-34
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2022
Retail
Finance
leases
Wholesale
and
other
dealer
loans
Within 1 year
.........................................
5,276,853
639,493
1,640,995
Between 1 and 2 years
..................................
3,988,650
482,368
319,847
Between 2 and 3 years
..................................
3,338,910
367,680
240,727
Between 3 and 4 years
..................................
2,546,568
198,789
161,717
Between 4 and 5 years
..................................
1,487,397
68,092
133,286
Later than 5 years
......................................
1,009,062
14,680
407,643
Total
............................................
17,647,440
1,771,102
2,904,216
Finance leases receivables consist
of the following:
Yen
in
millions
March
31,
2021
2022
Lease payments
..........................................................
1,511,577
1,771,102
Estimated unguaranteed residual
values
.......................................
519,703
576,839
Total
..........................................................
2,031,280
2,347,941
Deferred origination costs
..................................................
13,701
15,807
Less - Unearned income
...................................................
(169,098)
(190,954)
Less - Allowance for credit losses
...........................................
(33,455)
(36,985)
Finance leases receivables, net
..........................................
1,842,429
2,135,809
F-35
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
9.
Other
financial
assets
Other financial assets consist
of the following:
Yen
in
millions
March
31,
2021
2022
Financial assets measured at
amortized cost
Time deposits
.....................................................
2,566,221
505,695
Other
............................................................
554,997
680,199
Financial assets measured at
fair value through profit or
loss
Public and corporate bonds
...........................................
59,600
159,186
Stocks
...........................................................
317,101
149,890
Derivatives
.......................................................
282,364
419,173
Other
............................................................
489,824
465,801
Financial assets measured at
fair value through other comprehensive
income
Public and corporate bonds
...........................................
6,075,498
6,302,719
Stocks
...........................................................
2,945,780
3,332,209
Other
............................................................
7,986
9,644
Total
........................................................
13,299,371
12,024,515
Current assets
.........................................................
4,215,457
2,507,248
Non-current assets
......................................................
9,083,914
9,517,267
Total
........................................................
13,299,371
12,024,515
Toyota
has
certain
financial
instruments,
including
financial
assets
and
liabilities
which
arose
in
the
normal
course
of
business.
These
financial
instruments
are
executed
with
creditworthy
financial
institutions,
and
virtually
all
foreign
currency
contracts
are
denominated
in
U.S.
dollars,
euros
and
other
currencies
of
major
developed
countries.
Financial
instruments
involve,
to
varying
degrees,
market
risk
as
instruments
are
subject
to
price
fluctuations,
and
elements
of
credit
risk
in
the
event
a counterparty
should default.
In
the
unlikely
event
the
counterparties
fail to
meet the
contractual
terms of
a foreign
currency
or an
interest rate
instrument,
Toyota’s risk
is
limited
to
the
fair
value
of
the
instrument.
Although
Toyota
may
be
exposed
to
losses
in
the
event
of
non-performance
by
counterparties
on
financial
instruments,
it
does
not
anticipate
significant
losses
due
to
the
nature
of
its
counterparties.
Counterparties
to
Toyota’s
financial
instruments
represent,
in
general,
international
financial
institutions.
Additionally,
Toyota
does
not
have
a
significant
exposure
to
any
individual
counterparty.
Toyota believes that the overall
credit risk related to its
financial instruments
is not significant.
Public
and
corporate
bonds
included
in
financial
assets
measured
at
fair
value
through
other
comprehensive
income
include
securities
loaned
of
¥1,757,903
million
and
¥2,198,396
million
as
of
March
31,
2021
and
2022,
respectively.
F-36
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Major
securities
included
in
stocks
measured
at
fair
value
through
other
comprehensive
income
as
of
March 31, 2021 and 2022 are as follows:
Yen
in
millions
March
31,
Issue
2021
2022
KDDI CORPORATION
.................................................
1,075,517
1,268,762
NIPPON TELEGRAPH AND TELEPHONE
CORPORATION
..................
229,564
286,385
MS&AD Insurance Group Holdings, Inc.
....................................
173,171
209,318
HO TAI MOTOR CO., LTD.
.............................................
126,049
142,002
Mitsubishi UFJ Financial Group, Inc.
.......................................
105,256
134,248
To
facilitate
the
efficient
and
effective
utilization
of
assets,
Toyota
derecognizes
stocks
measured
at
fair
value
through
other
comprehensive
income
by
way
of
sale.
Fair
value
and
total
accumulated
other
comprehensive income at derecognition
are as follows:
Yen
in
millions
For
the
years
ended
March
31,
2021
2022
Total fair value
........................................................
40,903
66,906
Accumulated other comprehensive income,
net
...............................
17,323
27,861
10.
Inventories
Inventories consist of the following:
Yen
in
millions
March
31,
2021
2022
Products
..............................................................
1,749,415
2,012,243
Work in process
........................................................
350,308
547,810
Raw materials
.........................................................
644,779
1,107,558
Supplies and other
......................................................
143,526
153,745
Total
............................................................
2,888,028
3,821,356
11.
Investments
accounted
for
using
the
equity
method
Equity in associates and joint ventures
is as follows:
Yen
in
millions
March
31,
2021
2022
Associates
............................................................
3,467,503
3,926,267
Joint ventures
..........................................................
693,300
911,628
Total
............................................................
4,160,803
4,837,895
F-37
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
combined
information
of
investments
accounted
for
using
the
equity
method
(total
value
of
TMC’s
interests) is as follows:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Net income
Associates
................................................
195,569
190,998
324,480
Joint ventures
..............................................
114,678
160,031
235,866
Total
................................................
310,247
351,029
560,346
Other comprehensive income, net of
tax
Associates
................................................
42,904
50,143
241,264
Joint ventures
..............................................
(15,589)
38,501
66,187
Total
................................................
27,315
88,644
307,451
Comprehensive income
Associates
................................................
238,473
241,141
565,744
Joint ventures
..............................................
99,089
198,532
302,053
Total
................................................
337,562
439,673
867,798
12.
Property,
plant
and
equipment
The changes in cost and accumulated depreciation
and impairment losses
are as follows:
(Cost)
Yen
in
millions
Land
Buildings
Machinery
and
equipment
Vehicles
and
equipment
on
operating
leases
Construction
in
progress
Total
Balance as of April 1, 2020
......
1,318,964
4,741,451
11,979,449
5,928,833
517,460
24,486,156
Additions
................
22,720
90,363
414,934
2,281,434
639,205
3,448,655
Sales or disposal
...........
(13,005)
(36,586)
(472,197)
(2,163,259)
(4,846)
(2,689,893)
Reclassification from
construction in progress
. . .
6,890
101,216
485,705
537
(594,347)
Foreign currency translation
adjustments
.............
13,448
57,952
262,808
180,976
20,493
535,677
Other
....................
(3,979)
44,811
83,252
(24,799)
97,910
197,195
Balance as of March 31, 2021
....
1,345,037
4,999,206
12,753,951
6,203,721
675,875
25,977,791
Additions
................
9,106
88,543
481,916
2,293,189
629,786
3,502,541
Sales or disposal
...........
(8,901)
(57,743)
(540,775)
(2,334,129)
(3,639)
(2,945,187)
Reclassification from
construction in progress
. . .
2,310
105,581
630,896
449
(739,235)
Foreign currency translation
adjustments
.............
15,008
138,047
642,984
594,933
30,756
1,421,728
Other
....................
(769)
10,985
13,390
23,065
(28,014)
18,657
Balance as of March 31, 2022
....
1,361,791
5,284,620
13,982,362
6,781,229
565,528
27,975,530
F-38
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(Accumulated depreciation and impairment
losses)
Yen
in
millions
Land
Buildings
Machinery
and
equipment
Vehicles
and
equipment
on
operating
leases
Construction
in
progress
Total
Balance as of April 1, 2020
......
(
4
,
058)
(3,054,551)
(9,505,895)
(1,386,459)
(1,178)
(13,952,141)
Depreciation
..............
(118,975)
(673,612)
(770,354)
(1,562,940)
Impairment losses
.........
(70)
(70)
Sales or disposal
...........
1
2
24,717
443,307
748,189
1,216,226
Foreign currency translation
adjustments
.............
(240)
(34,630)
(204,607)
(39,880)
(50)
(279,408)
Other
....................
(211)
(6,299)
(64,468)
81,587
1,085
11,695
Balance as of March 31, 2021
....
(4,497)
(3,189,737)
(10,005,275)
(1,366,916)
(213)
(14,566,638)
Depreciation
..............
(
121,431)
(788,685)
(817,171)
(1,727,287)
Impairment losses
.........
(2,527)
(5,177)
(7,705)
Sales or disposal
...........
3
0
48,646
507,396
799,186
1,355,259
Foreign currency translation
adjustments
.............
(351)
(79,026)
(461,159)
(115,693)
(24)
(656,252)
Other
....................
(
1
,
562)
(31,522)
(10,054)
(3,073)
(55)
(46,266)
Balance as of March 31, 2022
....
(6,379)
(3,375,598)
(10,762,953)
(1,503,668)
(292)
(15,648,890)
Depreciation
on
“Property,
plant
and
equipment”
is
included
in
“Cost
of
products
sold”
and
“Selling,
general and administrative”
in the consolidated statement
of income.
Vehicles and equipment on operating leases
consist of the following:
Yen
in
millions
March
31,
2021
2022
Vehicles
................................................................
6,190,558
6,766,590
Equipment
..............................................................
13,164
14,639
6,203,721
6,781,229
Less - Accumulated depreciation
............................................
(1,366,916)
(1,503,668)
Vehicles and equipment on operating leases,
net
............................
4,836,805
5,277,561
F-39
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Future
expenses
from
vehicles
and
equipment
on
operating
leases
are
due
in
installments
and
rental
income
separated is as follows:
Yen
in
millions
March
31,
2021
2022
Within 1 year
........................................................
857,997
932,882
Between 1 and 2 years
.................................................
583,059
641,683
Between 2 and 3 years
.................................................
282,477
280,646
Between 3 and 4 years
.................................................
55,838
75,915
Between 4 and 5 years
.................................................
18,873
21,772
Later than 5 years
....................................................
5,706
9,801
Total future rentals
...............................................
1,803,950
1,962,699
The future rental income as shown above should
not be considered indicative of
future cash collections.
13.
Right
of
use
assets
and
lease
liabilities
The breakdown of right of use assets is as
follows:
Yen
in
millions
March
31,
2021
2022
Types of original assets
Land
...............................................................
46,868
67,927
Buildings
...........................................................
285,602
305,533
Other
..............................................................
57,674
74,952
Total
..........................................................
390,144
448,412
The
increase
in
the
right
of
use
assets
for
the
years
ended
on
March
31,
2021
and
2022
were
¥114,394 million and ¥110,996 million, respectively.
The breakdown of main gains and losses on lessee’s
leases is as follows:
Yen
in
millions
March
31,
2021
2022
Depreciation of right of use assets
Land
...............................................................
7,277
8,660
Buildings
...........................................................
45,852
56,262
Other
..............................................................
22,307
26,293
Total
..........................................................
75,436
91,214
Interest expense on lease liabilities
...........................................
4,118
4,074
Short-term leases
.........................................................
84,821
90,568
164,375
185,856
F-40
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
For
the
years
ended
March
31,
2021
and
2022,
the
total
cash
outflows
for
lessee
leases
were
¥133,698 million and ¥149,521 million, respectively.
The
following
is
the
maturity
analysis
of
the
total
future
lease
payments
and
the
adjustment
to
the
present
value:
Yen
in
millions
March
31,
2021
2022
Within 1 year
..........................................................
52,983
61,735
Between 1 and 5 years
...................................................
130,917
146,452
Later than 5 years
.......................................................
219,857
258,474
Future lease payment, total
............................................
403,757
466,661
Less - Interest expense
...............................................
(42,866)
(45,733)
Present value of lease payment, total
................................
360,891
420,928
Current liabilities
...................................................
47,120
56,136
Non-current liabilities
................................................
313,771
364,792
Present value of lease payment, total
................................
360,891
420,928
14.
Intangible
assets
The carrying value of intangible assets
is as follows:
Yen
in
millions
March
31,
2021
2022
Capitalized development costs
.............................................
631,176
663,762
Software and other
......................................................
477,458
528,204
Total
.............................................................
1,108,634
1,191,966
F-41
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The changes in cost, accumulated amortization
and impairment
losses of intangible assets
are as follows:
(Cost)
Yen
in
millions
Capitalized
development
costs
Software
and
other
Total
Balance as of April 1, 2020
.............................
991,675
600,716
1,592,391
Additions
.......................................
62,423
62,423
Internally developed
...............................
158,246
59,061
217,307
Sales or disposal
..................................
(45,779)
(57,047)
(102,825)
Foreign currency translation adjustments
..............
6,305
6,305
Other
...........................................
56,416
56,416
Balance as of March 31, 2021
...........................
1,104,142
727,874
1,832,016
Additions
.......................................
41,616
41,616
Internally developed
...............................
200,512
86,342
286,853
Sales or disposal
..................................
(163,419)
(60,981)
(224,400)
Foreign currency translation adjustments
..............
25,333
25,333
Other
...........................................
7,048
7,048
Balance as of March 31, 2022
...........................
1,141,234
827,232
1,968,466
(Accumulated amortization
and impairment losses)
Yen
in
millions
Capitalized
development
costs
Software
and
other
Total
Balance as of April 1, 2020
.............................
(366,202)
(225,932)
(592,134)
Amortization
....................................
(152,542)
(81,350)
(233,892)
Impairment losses
.................................
Sales or disposal
..................................
45,779
55,354
101,132
Foreign currency translation adjustments
..............
(2,818)
(2,818)
Other
...........................................
4,330
4,330
Balance as of March 31, 2021
...........................
(472,966)
(250,417)
(723,382)
Amortization
....................................
(167,926)
(94,593)
(262,518)
Impairment losses
.................................
Sales or disposal
..................................
163,419
60,375
223,794
Foreign currency translation adjustments
..............
(13,570)
(13,570)
Other
...........................................
(823)
(823)
Balance as of March 31, 2022
...........................
(477,472)
(299,028)
(776,500)
Amortization
of
intangible
assets
is
included
in
“Cost
of
products
sold”
and
“Selling,
general
and
administrative”
in
the
consolidated
statement
of
income.
There
is
no
material
internally
generated
intangible
assets except for capitalized
development costs.
F-42
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
15.
Income
taxes
(1)
Deferred
tax
assets
and
liabilities
Significant components of deferred
tax assets and liabilities
are as follows:
Yen
in
millions
March
31,
2021
2022
Deferred tax assets
Defined benefit plan liabilities
.........................................
172,237
141,186
Accrued expenses and liabilities
for quality assurance
......................
623,247
613,101
Other accrued employees’ compensation
.................................
127,339
128,461
Operating loss carryforwards for
tax purposes
.............................
14,263
64,740
Allowance for doubtful accounts and credit
losses
.........................
82,467
85,289
Property, plant and equipment and other
assets
............................
224,933
210,238
Other
.............................................................
400,000
491,167
Total deferred tax assets
..........................................
1,644,486
1,734,181
Deferred tax liabilities
Changes in fair value of financial
instruments measured in other
comprehensive
income
.........................................................
(661,221)
(725,242)
Undistributed earnings of foreign
subsidiaries
.............................
(18,539)
(51,888)
Undistributed earnings of associates
and joint ventures
......................
(902,680)
(1,026,027)
Basis difference of acquired assets
......................................
(48,371)
(63,189)
Capitalized development costs
.........................................
(195,033)
(204,741)
Lease transactions
...................................................
(533,167)
(468,894)
Other
.............................................................
(196,470)
(206,791)
Total deferred tax liabilities
.......................................
(2,555,481)
(2,746,773)
Net deferred tax assets and liabilities
................................
(910,996)
(1,012,592)
Of
the
changes
in
deferred
tax
assets
and
deferred
tax
liabilities
for
the
years
ended
March
31,
2020,
2021
and 2022, the amount recognized as income
tax expense in the consolidated statement
of income is as follows:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Defined benefit plan liabilities
....................................
16,927
12,473
4,203
Accrued expenses and liabilities
for quality assurance
.................
(18,676)
(18,256)
(40,761)
Other accrued employees’ compensation
............................
4,557
3,125
(968)
Operating loss carryforwards for
tax purposes
.......................
(295,656)
1,265
38,119
Allowance for doubtful accounts and credit
losses
....................
19,293
6,042
(4,902)
Property, plant and equipment and other
assets
.......................
(76,680)
4,468
(9,795)
Undistributed earnings of foreign
subsidiaries
.......................
1,290
6,144
(33,349)
Undistributed earnings of associates
and joint ventures
................
(33,008)
47,840
(71,405)
Basis difference of acquired assets
................................
(10,033)
(18,302)
(11,270)
Capitalized development costs
....................................
(4,434)
(1,762)
(9,708)
Lease transactions
.............................................
286,869
209,972
103,098
Other
........................................................
(83,216)
23,104
111,603
Total
....................................................
(192,767)
276,113
74,864
F-43
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
deductible
temporary
differences,
unused
tax
losses,
and
unused
tax
credits
for
which
no
deferred
tax
asset is recognized in the statement
of financial position:
Yen
in
millions
March
31,
2021
2022
Deductible temporary difference
...........................................
250,670
709,204
Carryforwards of tax losses
...............................................
379,566
518,385
Carryforwards of tax credit
...............................................
34,800
46,306
Total
.............................................................
665,037
1,273,894
The
expected
expiration
date
of
the
carryforwards
of
tax
losses
for
which
deferred
tax
assets
are
not
recognized are as follows:
Yen
in
millions
March
31,
2021
2022
Within 5 years
..........................................................
13,597
4,049
Between 5 and 10 years
..................................................
20,475
136,666
Later than 10 years
......................................................
345,493
377,670
Total
.............................................................
379,566
518,385
The
expected
expiration
date
of
the
carryforwards
of
tax
credit
for
which
deferred
tax
assets
are
not
recognized are as follows:
Yen
in
millions
March
31,
2021
2022
Within 5 years
..........................................................
5,097
8,654
Between 5 and 10 years
..................................................
2,340
9,865
Later than 10 years
......................................................
27,363
27,787
Total
.............................................................
34,800
46,306
Of the temporary
differences
in
investments in
foreign
subsidiaries,
because management
intends
to reinvest
undistributed
earnings
of
foreign
subsidiaries
to
the
extent
not
expected
to
be
remitted
in
the
foreseeable
future,
no
deferred
tax
liability
is
recognized.
As
of
March
31,
2021
and
2022,
the
temporary
differences
totaled
¥4,362,133 million
and ¥4,799,506
million, respectively,
and
Toyota estimates
an additional deferred
tax liability
of
¥202,533
million
and
¥203,229
million
would
be
required,
respectively,
if
the
full
amount
of
those
undistributed earnings were remitted.
F-44
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(2)
Income
tax
expenses
The income tax expense for the years
ended March 31, 2020, 2021 and 2022 consists of the following
:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Current income tax expense:
TMC and domestic subsidiaries
.........................
484,667
403,230
672,077
Foreign subsidiaries
...................................
4,383
522,859
518,705
Total current
....................................
489,050
926,089
1,190,782
Deferred income tax expense (benefit):
TMC and domestic subsidiaries
.........................
95,270
(23,792)
42,131
Foreign subsidiaries
...................................
97,498
(252,321)
(116,995)
Total deferred
...................................
192,767
(276,113)
(74,864)
Total income tax expense
..........................
681,817
649,976
1,115,918
Toyota
is
subject
to
a
number
of
different
income
taxes
which,
in
the
aggregate,
indicate
a
statutory
rate
in
Japan
of
approximately
30.9%
for
the
years
ended
March
31,
2020,
2021
and
2022.
The
statutory
tax
rates
in
effect
for
the
year
in
which
the
temporary
differences
are
expected
to
reverse
are
used
to
calculate
the
tax
effects
of temporary
differences
which
are
expected
to reverse
in future
years.
Reconciliation
of the
differences
between
the statutory tax rate and the
average effective tax rate
is as follows:
For
the
years
ended
March
31,
2020
2021
2022
Statutory tax rate
.........................................
30.9%
30.9%
30.9%
Increase (reduction) in taxes
resulting from:
Non-deductible expenses
...............................
0
.
4
0
.
5
0
.
6
Tax-exempt income
...................................
(0.5)
(0.4)
(0.3)
Deferred tax liabilities
on undistributed earnings of foreign
subsidiaries
.......................................
0
.
9
0
.
6
1
.
3
Effects of investments accounted
for using the equity
method
...........................................
(3.4)
(3.7)
(4.3)
Deferred tax liabilities
on undistributed earnings of associates
and joint ventures
..................................
2
.
1
(0.2)
2.6
Change in unrecognized deferred tax assets
................
0
.
9
0
.
7
3
.
7
Tax credits
..........................................
(4.5)
(3.2)
(2.7)
The difference between the statutory
tax rate in Japan and that
of foreign subsidiaries
...............................
(2.4)
(3.5)
(3.1)
Unrecognized tax benefits adjustments
....................
(0.4)
(0.2)
(0.3)
Other
..............................................
0
.
3
0
.
6
(0.3)
Average effective tax rate
..................................
24.4%
22.2%
28.0%
F-45
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
16.
Trade
accounts
and
other
payables
Trade accounts and other payables consists
of the following:
Yen
in
millions
March
31,
2021
2022
Accounts and notes payables
................................................
2,953,716
3,168,084
Other payables
...........................................................
1,092,223
1,124,008
Total
..............................................................
4,045,939
4,292,092
Trade accounts and other payables are
classified as financial
liabilities measured
at amortized cost.
F-46
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
17.
Financial
liabilities
(1)
Financial
liabilities
Financial liabilities
consist of the following:
Yen
in
millions
Non-cash
changes
As
of
April
1,
2020
Cash
flow
Acquisitions
Reclassification
Changes
in
foreign
currency
exchange
rates
Changes
in
fair
value
Other
As
of
March
31,
2021
Current liabilities
Short-term debt
...............
5,295,448
(1,038,438)
220,056
(137,175)
4,339,890
Current portion of long-term
debt
.......................
4,568,140
(5,371,616)
8,421,718
(33,905)
7,584,337
Current portion of long-term lease
liabilities
...................
43,166
(44,760)
30,299
991
17,424
47,120
Class share
...................
240,712
240,712
Current liabilities
..........
9,906,755
(6,454,814)
8,692,730
221,047
(153,657)
12,212,060
Non-current liabilities
Long-term debt
................
10,669,599
9,914,667
(8,421,718)
963,179
8,076
13,133,804
Long-term lease liabilities
.......
265,879
114,394
(30,299)
4,266
(40,468)
313,771
Class share
...................
498,740
(258,451)
(240,712)
424
Non-current liabilities
......
11,434,219
9,656,216
114,394
(8,692,730)
967,445
(31,968)
13,447,575
Total
....................
21,340,973
3,201,402
114,394
1,188,491
(185,625)
25,659,635
Derivatives
.......................
182,726
(44,563)
55
(135,007)
3,211
Yen
in
millions
Non-cash
changes
As
of
April
1,
2021
Cash
flow
Acquisitions
Reclassification
Changes
in
foreign
currency
exchange
rates
Changes
in
fair
value
Other
As
of
March
31,
2022
Current liabilities
Short-term debt
...............
4,339,890
(579,216)
334,639
9,544
4,104,858
Current portion of long-term
debt
.......................
7,584,337
(8,548,156)
7,410,991
572,070
7,604
7,026,845
Current portion of long-term lease
liabilities
...................
47,120
(54,879)
34,071
2,192
27,632
56,136
Class share
...................
240,712
(240,630)
(83)
Current liabilities
..........
12,212,060
(9,422,881)
7,445,062
908,902
44,697
11,187,839
Non-current liabilities
Long-term debt
................
13,133,804
8,122,678
(7,410,991)
1,095,463
2,773
14,943,727
Long-term lease liabilities
.......
313,771
110,996
(34,071)
14,203
(40,107)
364,792
Class share
...................
Non-current liabilities
......
13,447,575
8,122,678
110,996
(7,445,062)
1,109,666
(37,334)
15,308,519
Total
....................
25,659,635
(1,300,203)
110,996
2,018,568
7,363
26,496,358
Derivatives
.......................
3,211
(12,026)
689
15,348
7,221
Short-term and long-term debt
is classified as financial
liabilities measured
at amortized cost.
F-47
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(2)
Short-term
debt
The breakdown of “Short-term debt” is as
follows:
Yen
in
millions
March
31,
2021
2022
Short-term debt
(Principally from bank)
[Weighted average interest
rate
2021
1.37%
2022
1.64%]
...................................................
1,109,904
852,301
Commercial paper
[Weighted average interest
rate
2021
0.16%
2022
0.38%]
...................................................
3,229,986
3,252,556
4,339,890
4,104,858
(3)
Long-term
debt
The breakdown of “Long-term debt” is as follows:
Yen
in
millions
March
31,
2021
2022
Unsecured loans
(Principally from bank)
2021
Weighted average interest 1.40%
Due 2021 to 2042
2022
Weighted average interest 1.83%
Due 2022 to 2042]
..............................................
5,582,426
4,990,165
Secured loans
(Principally financial receivables
securitization)
2021
Weighted average interest 1.25%
Due 2021 to 2034
2022
Weighted average interest 1.02%
Due 2022 to 2034]
..............................................
3,233,353
3,902,766
Medium-term notes of consolidated
subsidiaries
2021
Weighted average interest 1.56%
Due 2021 to 2048
2022
Weighted average interest 1.45%
Due 2022 to 2048]
..............................................
9,209,453
10,257,689
F-48
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2021
2022
Unsecured bonds of the parent
2021
Weighted average interest 1.40%
Due 2021 to 2037
2022
Weighted average interest 1.32%
Due 2022 to 2037]
..............................................
1,161,938
1,123,145
Unsecured bonds of consolidated subsidiaries
2021
Weighted average interest 1.57%
Due 2021 to 2028
2022
Weighted average interest 1.99%
Due 2022 to 2028]
..............................................
1,495,976
1,664,634
Secured bonds of consolidated subsidiaries
2021
Weighted average interest 6.34%
Due 2022 to 2024
2022
Weighted average interest 5.81%
Due 2022 to 2024]
..............................................
34,996
32,174
20,718,142
21,970,573
Less - Current portion due within one year
...................................
(7,584,337)
(7,026,845)
13,133,804
14,943,727
As
of
March
31,
2021
and
2022,
the
currencies
of
long-term
debt
are
49%
and
52%
in
US
dollars,
16%
and
11%
in
Japanese
yen,
12%
and
13%
in
Euros,
6%
and
6%
in
Australian
dollars
, 3%
and 4%
in Canadian
dollars,
14% and 14% in other currencies.
(4)
Assets
pledges
as
collateral
The breakdown of assets pledged as collateral
mainly for loans of consolidated
subsidiaries is as
follows:
Yen
in
millions
March
31,
2021
2022
Property, plant and equipment
............................................
754,132
1,474,647
Other assets
...........................................................
3,278,448
3,582,826
Total
............................................................
4,032,580
5,057,473
Other assets principally consist
of securitized finance
receivables.
Standard
agreements
with
certain
banks
include
provisions
that
collateral
(including
sums
on
deposit
with
such banks)
or
guarantees
will be
furnished
upon the
banks’
request
and that
any
collateral
furnished,
pursuant
to
such agreements or otherwise, will
be applicable to all present
or future indebtedness to such banks.
F-49
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(5)
Interest
expenses
The
interest
expenses
for
the
fiscal
year
ended
March
31,
2021
and
2022
are
¥471,505
million
and
¥410,197 million,
respectively.
Interest
expenses
related
to
the
financial
business
is
included
in
“cost of
financial
services” in the consolidated
statement of income.
(6)
Class
shares
TMC
issued
First
Series
Model
AA
Class
Shares
(the
“Model
AA
Class
Shares”)
on
July
24,
2015.
Presented below is additional information
regarding the Model AA Class Shares:
Total number of shares issued
:
47,100,000 shares
Issue price
:
10,598 yen per share
Purchase price
:
10,121.09 yen per share
Voting rights
:
Model
AA
Class
Shares
shall
have
voting
rights.
The
number
of
shares
constituting one unit with respect
to Model AA Class Shares shall be 100.
Restrictions on transfer
:
Model AA Class Shares shall
have restrictions on transfer.
Dividends
:
(1)
If
the
record
date
falls
in
the
fiscal
year
ending
on
March
31,
2016
:
0.5% of the issue price
(2)
If
the
record
date
falls
in
the
fiscal
year
ending
on
March
31,
2017
through
March
31,
2020
:
the
annual
dividend
rate
for
the
previous
fiscal year plus 0.5% of the issue
price
(3)
If
the
record
date
falls
in
the
fiscal
year
ending
on
March
31,
2021
or
later : 2.5% of the issue price
Shareholder’s right
:
(1)
Shareholder’s
conversion right into Common Shares
Shareholders
of
the
Model
AA
Class
Shares
may
demand
TMC
to
acquire
all
or
a
part
of
their
Model
AA
Class
Shares
in
exchange
for
Common
Shares
on
the
first
business
day
of
April
and
October
of
every year, starting October 1, 2020.
(2)
Shareholder’s
cash put option
Shareholders
of
the
Model
AA
Class
Shares
may
demand
TMC
to
acquire
all
or
a
part
of
their
Model
AA
Class
Shares
in
exchange
for
cash
on
the
last
business
day
of
March,
June,
September
and
December of each year, starting
on September 1, 2020.
TMC’s right
:
TMC
may
acquire,
on
or
after
April
2,
2021,
all
of
the
outstanding
Model
AA
Class
Shares
in
exchange
for
cash.
At
the
Directors’
Meeting
held
on
December
14,
2020,
TMC
has
resolved
to
exercise
its
cash
call
option
to
acquire
all
outstanding
Model
AA
Class
Shares
and,
subject
to
such
acquisition,
to
cancel
all
Model
AA
Class
Shares
pursuant
to
Article
178
of
the
Companies
Act
of
Japan.
The
acquisition
took
place
on
April
2,
2021, and the cancellation was completed
on April 3, 2021.
F-50
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
18.
Other
financial
liabilities
Other financial liabilities
consist of the following:
Yen
in
millions
March
31,
2021
2022
Financial liabilities
measured at amortized cost
Deposits received
....................................................
440,275
723,363
Other
..............................................................
221,052
287,072
Financial liabilities
measured at fair value through
profit or loss
Derivatives
.........................................................
425,980
497,198
Total
..........................................................
1,087,307
1,507,633
Current liabilities
.........................................................
763,875
1,046,050
Non-current liabilities
.....................................................
323,432
461,583
Total
..........................................................
1,087,307
1,507,633
19.
Financial
risks
(1)
Financial
risk
management
policy
Toyota
is
exposed
to
various
risks
such
as
credit
risk,
liquidity
risk,
market
risk
(foreign
currency
risk,
interest
rate
risk,
commodity
price
fluctuation
risk
and
stock
price
fluctuation
risk).
To
hedge
the
market
risk,
Toyota
also
uses
derivative
financial
instruments
such
as
forward
exchange
contracts,
interest
rate
swaps,
commodity
forwards
transactions.
With
respect
to
the
execution
and
management
of
derivative
transactions,
it
follows
the
company
regulations
that
set
out
transaction
authority,
and
it
is
a
policy
not
to
conduct
speculative
transactions using derivative
financial instruments.
In
addition,
Toyota
procures
necessary
funds
(mainly
bank
borrowings
and
issuing
corporate
bonds)
based
on
the
capital
expenditure
plans,
and
temporary
surplus
funds
are
managed
with
highly
safe
financial
assets
and
short-term
working
capital
is
procured
through
bank
borrowings
and
commercial
paper.
As
for
liquidity
risk
concerning fund procurement, each company
manages it by preparing a monthly
cash flow plan, etc.
(2)
Credit
risk
Receivables
related
to
financial
services
are
exposed
to
the
credit
risk.
The
risk
is
arisen
from
the
failure
of
customers
or
dealers
to
meet
the
terms
of
their
contracts
with
Toyota
or
otherwise
fail
to
perform
as
agreed.
Toyota
manages
its
credit
risk
by
defining
risk
management
methods
and
management
systems
for
specific
risks
in
accordance
with
the
regulations
on
risk
management.
Based
on
such
regulations,
Toyota
mitigates
the
credit
risk
through
periodical
monitoring
of
the
customer’s
credit
status
and
undertaking
the
maturity
control
and
account
balance
control,
while
detecting
promptly
any
doubtful
accounts
caused
by
deterioration
in
the
financial
conditions.
Please
see
Note
3
“Allowance
for
credit
losses
on
finance
receivables”
about
measuring
method
of
the
expected credit losses on receivables
related to financial
services.
The
carrying
amount
after
impairment
of
the
financial
assets
presented
in
the
consolidated
financial
statements,
as
well
as
guarantee
obligations
and
loan
commitments
that
are
set
forth
in
the
notes
to
the
F-51
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
consolidated
financial
statements,
are
the
maximum
exposure
to
the
credit
risk
of
Toyota’s
financial
assets that
do
not take
into
account the
value
of the
acquired
collateral.
The
allowance for
credit
exposures of
loan commitments
and financial agreements is measured in the same way
that the allowance for retail receivables is measured.
Retail
receivables
and
financial
lease
receivables
are
being
secured
by
vehicles
as
collateral.
Wholesale
receivables
and
other
dealer
loans
are
secured
by
placing
appropriate
property
as
collateral.
Also,
during
the
reporting period, there is no change
in the policy regarding collateral.
The net changes in the allowance for credit
losses relating to the
retail receivables are
as follows:
Yen
in
millions
For
the
year
ended
March
31,
2021
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Allowance for credit loss at beginning
of year
....
60,078
66,813
32,879
159,770
Provision for credit loss, net
of reversal
.........
28,378
34,992
46,232
109,602
Charge-offs
................................
(50,485)
(50,485)
Other
.....................................
(9,053)
(23,380)
11,750
(20,683)
Allowance for credit loss at end of
year
.........
79,402
78,426
40,376
198,204
Yen
in
millions
For
the
year
ended
March
31,
2022
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Allowance for credit loss at beginning
of year
....
79,402
78,426
40,376
198,204
Provision for credit loss, net
of reversal
.........
22,685
39,420
38,687
100,792
Charge-offs
................................
(
41,331)
(41,331)
Other
.....................................
(
13,961)
(18,381)
4,781
(27,561)
Allowance for credit loss at end of
year
.........
88,125
99,465
42,514
230,104
“Other” primarily includes reversal
of allowance for credit
loss due to the collection
of retail receivables.
The
table
below
shows
the
retail
receivables
segregated
into
aging
categories
based
on
the
numbers
of
the
days outstanding:
Yen
in
millions
March
31,
2021
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Current
...................................
13,638,143
824,508
14,462,651
Past due less than 90 days
....................
213,860
273,282
17,527
504,670
Past due 90 days or more
.....................
1,381
79,731
81,112
Total
.................................
13,852,004
1,099,171
97,258
15,048,433
F-52
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2022
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Current
...................................
15,753,211
1,083,642
16,836,854
Past due less than 90 days
....................
283,753
405,941
17,655
707,350
Past due 90 days or more
.....................
7
7
9
102,457
103,236
Total
.................................
16,036,965
1,490,363
120,112
17,647,440
The net changes in the allowance for credit
losses relating to the
finance lease receivables
are as follows:
Yen
in
millions
For
the
years
ended
March
31,
2021
2022
Allowance for credit loss at beginning
of year
..............................
30,899
33,455
Provision for credit loss, net
of reversal
...................................
8,663
11,107
Charge-offs
.........................................................
(3,310)
(3,712)
Other
..............................................................
(2,798)
(3,865)
Allowance for credit loss at end of
year
...................................
33,455
36,985
“Other”
primarily
includes
reversal
of
allowance
for
credit
loss
due
to
the
collection
of
finance
lease
receivables.
The
table
below
shows
the
finance
lease
receivables
segregated
into
aging
categories
based
on
the
numbers
of the days outstanding:
Yen
in
millions
March
31,
2021
2022
Current
.............................................................
1,945,198
2,279,978
Past due less than 90 days
..............................................
50,992
47,034
Past due 90 days or more
...............................................
35,089
20,928
Total
..........................................................
2,031,280
2,347,941
F-53
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
table
below
shows
the
net
movement
of
the
allowance
for
credit
losses
on
wholesale
receivables
and
other dealer loans.
Yen
in
millions
For
the
year
ended
March
31,
2021
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Allowance for credit loss at beginning
of year
....
27,556
13,634
3,989
45,179
Provision for credit loss, net
of reversal
.........
2,293
1,975
1,593
5,861
Charge-offs
................................
(209)
(209)
Other
.....................................
(12,382)
(8,368)
(437)
(21,188)
Allowance for credit loss at end of
year
.........
17,467
7,241
4,935
29,642
Yen
in
millions
For
the
year
ended
March
31,
2022
Expected
credit
loss
for
12
months
Expected
credit
loss
for
the
entire
period
Total
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Allowance for credit loss at beginning
of year
....
17,467
7,241
4,935
29,642
Provision for credit loss, net
of reversal
.........
5,198
1,566
1,177
7,941
Charge-offs
................................
(11)
(11)
Other
.....................................
(
8,317)
(3,715)
(705)
(12,736)
Allowance for credit loss at end of
year
.........
14,349
5,092
5,396
24,836
“Other”
primarily
includes
reversal
of
allowance
for
credit
loss
due
to
the
collection
of
wholesale
receivables and other dealer
loans.
Toyota
charges
off
the
credit
-
impaired
finance
receivables
when
Toyota
considers
that
all
or
part
of
it
will
not
be
collected.
The
amount
of
receivables
related
to
financial
services
which
has
been
charged
off
but
subject
to ongoing collection activity
was not significant for the years
ended March 31, 2021 and 2022.
The
balances
of
the
wholesale
receivables
and
other
dealer
loan
receivables
portfolios
by
credit
status,
as
well as loan commitments and financial
guarantee contracts,
as of March 31, 2021 and 2022 are as follows.
The
wholesale
and
other
dealer
loan
receivables
portfolio
segment
is
segregated
into
following
creditqualities below based on internal
risk assessments by dealers.
Performing: Account not classified
as either
Credit Watch, At Risk or DefaultCredit Watch:
Account designated for elevated
attention
At
Risk:
Account
where
there
is
an
increased
likelihood
that
default
may
exist
based
on
qualitative
and
quantitative factors
F-54
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Default:
Account
is
not
currently
meeting
contractual
obligations,
or
we
have
temporarily
waived
certain
contractual requirements
Yen
in
millions
March
31,
2021
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Total
Wholesale and other dealer loan
Performing
............................
2,956,452
2,956,452
Credit Watch
..........................
82,046
78,509
160,554
At Risk
...............................
48,354
2,388
50,742
Default
...............................
17,736
17,736
Loan commitments
..........................
9,917,155
96,266
412
10,013,832
Financial guarantee contracts
..................
3,574,943
31,465
3,606,408
Total
.............................
16,530,596
254,594
20,535
16,805,725
Yen
in
millions
March
31,
2022
Expected
credit
loss
for
12
months
Lifetime
expected
credit
loss
Financial
receivable
not
credit-impaired
Credit-impaired
financial
receivable
Total
Wholesale and other dealer loan
Performing
............................
2,730,860
2,730,860
Credit Watch
..........................
20,842
97,353
118,196
At Risk
...............................
32,299
699
32,998
Default
...............................
22,162
22,162
Loan commitments
..........................
10,050,817
69,393
90
10,120,300
Financial guarantee contracts
..................
3,574,257
39,205
3,613,461
Total
.............................
16,376,776
238,251
22,952
16,637,978
For
the
year
ended
March
31,
2021
and
2022,
the
amount
of
finance
receivables
the
terms
of
which
were
modified
due
to
deterioration
in
credit
conditions
was
not
significant
for
any
portfolio
of
finance
receivables,
and
the
amount
of
payment
defaults
on
finance
receivables
so
modified
were
not
significant
for
any
portfolio of such receivables.
(3)
Liquidity
risk
To
secure
cash
on
hand
necessary
for
carrying
out
the
operation,
Toyota
appropriately
borrows
from
the
financial
institutions
and
issues
corporate
bonds
or
commercial
paper,
and
there
is
a
risk
of
failing
to
execute
the
payment on due date because of deterioration
of fund procurement environment
etc.,.
Toyota
manages
liquidity
risk
by
monitoring
the
fund
demand
of
each
group
company
as
appropriate,
preparing
a
monthly-based
funding
plan,
and
comparing
it
with
the
daily
cash
flow.
In
addition
to
holding
sufficient
cash
and
cash
equivalents
in
order
to
secure
the
liquidity
and
stability
of
funds,
to
prepare
for
emergency
situations
such
as
the
sudden
fund
demand
and
market
liquidity
deterioration,
a
commitment
line
has
been set up.
F-55
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The amounts of non-derivative
financial
liabilities and derivative
financial liabilities
by a remaining contract
maturity period are as follows:
As of March 31, 2021
Yen
in
millions
Maturities
Book
value
Contractual
cash
flows
Within
1
year
Between
1
and
3
years
Between
3
and
5
years
Later
than
5
years
Non-derivative financial liabilities
Short-term debt
...............
1,109,904
(1,119,748)
(1,119,748)
Commercial paper
.............
3,229,986
(3,233,528)
(3,233,528)
Current portion of long-term
debt
......................
7,584,337
(7,781,816)
(7,781,816)
Long-term debt
...............
13,133,804
(13,615,831)
(8,135,588)
(3,871,044)
(1,609,200)
Lease liabilities
...............
360,891
(403,757)
(52,983)
(78,623)
(52,294)
(219,857)
Class share
...................
240,712
(243,650)
(243,650)
Total
...............
25,659,635
(26,398,330)
(12,431,725)
(8,214,211)
(3,923,338)
(1,829,057)
Derivative financial liabilities
Interest derivative
.............
288,853
(291,818)
(75,477)
(147,811)
(45,699)
(22,832)
Currency derivative
I
n
......................
453,701
228,651
151,430
49,701
23,919
O
u
t
.....................
137,127
(593,702)
(353,986)
(163,366)
(51,643)
(24,707)
Total
...............
425,980
(431,820)
(200,812)
(159,747)
(47,640)
(23,620)
Total
...........
26,085,615
(26,830,150)
(12,632,537)
(8,373,958)
(3,970,978)
(1,852,677)
As of March 31, 2022
Yen
in
millions
Maturities
Book
value
Contractual
cash
flows
Within
1
year
Between
1
and
3
years
Between
3
and
5
years
Later
than
5
years
Non-derivative financial liabilities
Short-term debt
...............
852,301
(865,873)
(865,873)
Commercial paper
.............
3,252,556
(3,260,578)
(3,260,578)
Current portion of long-term
debt
......................
7,026,845
(7,238,356)
(7,238,356)
Long-term debt
...............
14,943,727
(15,458,478)
(9,194,302)
(4,501,420)
(1,762,756)
Lease liabilities
...............
420,928
(466,661)
(61,735)
(85,791)
(60,661)
(258,474)
Class share
...................
Total
...............
26,496,358
(27,289,948)
(11,426,543)
(9,280,094)
(4,562,081)
(2,021,230)
Derivative financial liabilities
Interest derivative
.............
325,912
(346,482)
(56,824)
(112,352)
(110,592)
(66,715)
Currency derivative
I
n
......................
958,208
358,275
83,552
379,916
136,465
O
u
t
.....................
171,286
(1,164,801)
(475,869)
(94,949)
(420,302)
(173,682)
Total
...............
497,198
(553,075)
(174,417)
(123,748)
(150,978)
(103,932)
Total
...........
26,993,557
(27,843,023)
(11,600,961)
(9,403,841)
(4,713,059)
(2,125,162)
F-56
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Toyota
has
unused
short-term
lines
of
credit
amounting
to
¥1,836,532
million
and
¥2,534,291
million
of
which
¥550,408
million
and ¥1,056,931
million
related
to
commercial
paper
programs
as
of
March
31,
2021
and
2022,
respectively.
Under
these
programs,
Toyota
is
authorized
to
obtain
short-term
financing
at
prevailing
interest rates for periods
not in excess of 360 days.
As
of
March
31,
2021
and
2022,
Toyota
has
unused
long-term
lines
of
credit
amounting
to
¥6,446,277 million and ¥9,030,322 million, respectively.
(4)
Foreign
exchange
risk
Toyota
is
subject
to
the
foreign
currency
exposure
through
transactions
in
foreign
currencies
related
to
purchase,
sale
and
finance
associated
with
conducting
business
worldwide.
Toyota
is
exposed
to
fluctuations
risks
related
to
future
profitability
or
assets
and
liabilities
regarding
operating
cash
flow
denominated
in
foreign
currencies
and
various
financial
instruments.
The
most
significant
foreign
currency
exposure
is
primarily
caused
by the U.S. dollar and the euro.
Toyota uses
derivative
financial
instruments
including
foreign
exchange forward
contracts,
foreign
currency
options,
interest
rate
currency
swap
agreements,
and
others,
to
manage
the
exposure
to
foreign
currency
exchange rate fluctuations.
Toyota
uses
Value-at-risk
analysis
measurement
(“VaR”)
to
assess
the
risk
of
exchange
rate
fluctuation.
Potential
impact
of
pre-tax
cash
flows
on
VaR-integrated
foreign
currency
positions
(including
derivatives)
for
the years ended March 31, 2021 and 2022 is as follows:
Yen
in
millions
VaR
Year-end
Average
Maximum
Minimum
For the year ended March 31, 2021
............................
196,900
187,725
196,900
178,400
For the year ended March 31, 2022
............................
257,600
241,825
263,600
214,800
The Monte Carlo
simulation
method is
used for
Toyota’s VaR measurement,
and measurement
is based
on a
95% confidence interval and a ten-day
holding period.
(5)
Interest
rate
risk
In
preceding
with
business
activities,
Toyota
is
exposed
to
interest
rate
risk
due
to
fluctuation
in
market
interest
rates
as
it
procures
and
invests
funds necessary
for
working
capital
and capital
investment.
To
maintain
a
desirable
level
of
exposure
related
to
interest
rate
fluctuation
risk
and
minimize
interest
expense,
Toyota
conducts various financial instruments
transactions.
Sensitivity
analysis
of
Toyota’s
interest
rate
risk
associated
with
holding
financial
instruments
if
the
interest
rate increases by 1% is as follows.
In this analysis, all other
variables are assumed to be
constant.
Yen
in
millions
For
the
years
ended
March
31,
2021
2022
Impact on income before income
taxes
....................................
(40,536)
(64,533)
Impact on other comprehensive income,
before tax effect
.....................
(238,986)
(243,630)
F-57
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(6)
Market
price
fluctuation
risk
Toyota
is
exposed
to
risks
arising
from
increased
costs
due
to
commodity
price
fluctuations,
such
as
iron
and
steel,
precious
metals
and
non-ferrous
alloys
used
in
the
manufacture
of
automobiles.
Toyota
controls
the
price risk associated with the
purchase of those commodities
by maintaining inventory at the
minimum level.
Toyota
is
exposed
to
stock
price
fluctuation
risk
because
it
owns
shares
of
companies
that
have
business
relationships
mainly
for
promoting
smooth
business
activities.
Toyota
periodically
reviews
the
fair
values
and
financial
situations
of
the
business
partner
companies
and,
taking
into
consideration
the
relationship
with
them,
continually
reviews
the
holding
status.
The
impact
on
other
comprehensive
income,
before
tax
effect
when
the
declared
price
of
equity
financial
assets
(shares)
in
active
markets
changes
by
10%
for
the
year
ended
March
31,
2021, and 2022 is ¥262,396 million and ¥316,281 million, respectively.
20.
Derivative
financial
instruments
(1)
Undesignated
derivative
financial
instruments
Toyota
uses
foreign
exchange
forward
contracts,
foreign
currency
options,
interest
rate
swaps,
interest
rate
currency
swap
agreements,
and
interest
rate
options,
to
manage
its
exposure
to
foreign
currency
exchange
rate
fluctuations
and
interest
rate
fluctuations
from
an
economic
perspective,
and
Toyota
is
unable
to
or
has
elected
not to apply hedge accounting. Toyota does not use derivatives
for speculation
or trading.
(2)
Fair
value
and
gain
and
losses
of
derivatives
The fair values of the derivatives
as of March 31, 2021 and 2022 are as follows:
Yen
in
millions
March
31,
2021
2022
Derivative
assets
Derivative financial instruments
not designated as hedging instruments:
Interest rate and currency swap
Current assets
- Other financial assets
..................................
37,852
69,625
Non-current assets
- Other financial assets
..................................
236,023
333,683
Total
............................................
273,876
403,309
Foreign exchange forward and option contracts
Current assets
- Other financial assets
..................................
8,488
15,865
Non-current assets
- Other financial assets
..................................
Total
............................................
8,488
15,865
Total
derivative
assets
..................................................
282,364
419,173
F-58
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2021
2022
Derivative
financial
liabilities
Derivative financial instruments
not designated as hedging instruments:
Interest rate and currency swap
Current liabilities
- Other financial liabilities
...............................
(89,681)
(87,926)
Non-current liabilities
- Other financial liabilities
...............................
(226,434)
(326,177)
Total
............................................
(316,115)
(414,102)
Foreign exchange forward and option contracts
Current liabilities
- Other financial liabilities
...............................
(109,865)
(83,096)
Non-current liabilities
- Other financial liabilities
...............................
Total
............................................
(109,865)
(83,096)
Total
derivative
liabilities
...............................................
(425,980)
(497,198)
The amount of underlying notional of derivatives
as of March 31, 2021 and 2022 are as
follows:
Yen
in
millions
March
31,
2021
2022
Derivative financial instruments
not designated as hedging instruments:
Interest rate and currency swap
........................................
21,453,268
21,510,803
Foreign exchange forward and option contracts
...........................
4,884,400
2,976,488
Total
........................................................
26,337,668
24,487,291
Undesignated
derivative
financial
instruments
are
used
to
manage
economic
risks
of
fluctuations
in
foreign
currency exchange
rates and
interest
rates of certain
receivables
and payables. Those
economic risks are
offset by
changes in the fair value of undesignated
derivative financial
instruments.
The
gain
(loss)
on
derivative
transactions
as
of
March
31,
2020,
2021
and
2022
were
¥13,419
million,
¥588
million
and
¥773
million,
respectively.
The
amounts
are
included
in
cost
of
financial
services
and
foreign
exchange gain (loss), net.
Cash
flows
from
transactions
of
derivative
financial
instruments
are
included
in
cash
flows
from
operating
activities in the consolidated
statement of cash flows.
(3)
Credit
risk
related
contingent
features
Toyota enters
into
International
Swaps and
Derivatives
Association
Master
Agreements
with
counterparties.
These Master
Agreements
contain a
provision
requiring
either
Toyota or
the
counterparty
to
settle
the
contract or
to post assets to the other party
in the event of a ratings downgrade below a
specified threshold.
F-59
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
aggregate
fair
value
amount
of
derivative
financial
instruments
that
contain
credit
risk
related
contingent
features
that
are
in
a
net
liability
position
after
being
offset
by
cash
collateral
as
of
March
31,
2021
and 2022
is ¥35,148
million
and
¥36,190 million,
respectively.
The
aggregate
fair value
amount of
assets
that are
already
posted
as
cash
collateral
as
of
March
31,
2021
and
2022
is
¥75,394
million
and
¥99,718
million,
respectively.
If
the
ratings
of
Toyota
decline
below
specified
thresholds,
the
maximum
amount
of
assets
to
be
posted or
for
which
Toyota
could
be
required
to
settle
the
contracts
is
¥36,190
million
as
of
March
31, 2022.
See
Note 22 for details.
21.
Fair
value
measurements
(1)
Definition
of
fair
value
hierarchy
In
accordance
with
IFRS,
Toyota
classifies
fair
value
measurement
into
the
following
three
levels
based
on
the observability and significance
of the inputs used.
Level
1:
Quoted
prices in active markets
for identical assets or liabilities
Level
2:
Fair
value
measurement
based
on
inputs
other
than
quoted
prices
included
within
Level
1
that
are observable for the assets
or liabilities, either
directly or indirectly
Level
3:
Fair
value measurement based on models
using unobservable inputs for the
assets or liabilities
(2)
Method
of
fair
value
measurement
The
fair
value
of
assets
and
liabilities
is
determined
using
relevant
market
information
and
appropriate
valuation methods.
The methods and assumptions for measuring
the fair value of assets
and liabilities are as follows:
(i) Cash and cash equivalents -
Cash
equivalents
include
money
market
funds
and
other
investments
with
original
maturities
of
three
months or
less. In
the normal
course of
business,
substantially all
cash
and cash
equivalents and
time deposits
are
highly liquid and are carried at
amounts which approximate fair
value due to their short duration.
(ii) Trade accounts and other receivables
and Trade accounts and other
payables -
These
receivables
and
payables
are
carried
at
amounts
which
approximate
fair
value
due
to
their
short
duration.
(iii) Receivables related
to financial services -
The
fair
value
of
receivables
related
to
financial
services
is
estimated
by
discounting
expected
cash
flows
to
present
value
using
internal
assumptions,
including
prepayment
speeds,
expected
credit
losses
and
collateral
value.
As
unobservable
inputs
are
utilized,
the
fair
value
of
receivables
related
to
financial
services
is
classified
as
Level 3.
(iv) Other financial assets
-
(Public and corporate bonds)
F-60
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Public
and
corporate
bonds
include
government
bonds.
Japanese
bonds
and
foreign
bonds,
including
U.S.,
European
and
other
bonds,
represent
28%
and
72%
(as
of
March
31,
2021)
and
26%
and
74%
(as
of
March
31,
2022) of public and
corporate bonds, respectively.
Toyota primarily
uses quoted market
prices for identical
assets
to measure the fair value of
these securities.
(Stocks)
Listed
stocks
on
the
Japanese
stock
markets
represent
89%
(as
of
March
31,
2021)
and
85%
(as
of
March
31,
2022)
of
stocks
that
Toyota
holds.
Toyota
primarily
uses
quoted
market
prices
for
identical
assets
to
measure fair value of these
securities. Therefore, stocks
with an active market are classified
as Level 1.
Fair
value
of
stocks
with
no
active
market
is
measured
by
using
the
market
approach
or
other
appropriate
methods. Therefore, stocks with no active
market are thus classified
as Level 3.
Price
book-value
ratios
(“PBR”)
of
comparable
companies,
discount
ratios
of
discounted
cash
flow
valuation
method
and
others
are
the
significant
unobservable
inputs
relating
to
the
fair
value
measurement
of
stocks
classified
as
Level
3.
The
fair
value
increases
(decreases)
as
PBR
of
a
comparable
company
rises
(declines)
or
the
discount
rate
declines
(rises).
The
estimated
increase
or
decrease
in
fair
value
of
stocks
if
the
unobservable inputs were to be replaced
by other reasonable alternative
assumptions are not significant.
These estimates
are based on
valuation methods
that are considered
appropriate in
each case. The
significant
assumptions
involved
in
the
estimations
include
the
financial
condition
and
future
prospects
and
trends
of
the
investees
and
the
outcome
of
the
referenced
transactions.
Due
to
the
uncertain
nature
of
these
assumptions
or
by
using different assumptions
and estimates, the fair value
may be impacted materially.
The
shares
classified
as
Level
3
are
measured
by
the
responsible
department
using
quarterly
available
information
in
accordance
with
Toyota’s
consolidated
financial
accounting
policies
and
reported
to
the
supervisors along with the basis of
the change in fair value.
(v) Derivative financial instruments
-
Toyota
employs
derivative
financial
instruments,
including
foreign
exchange
forward
contracts,
foreign
currency
options,
interest
rate
swaps,
interest
rate
currency
swap
agreements
and
interest
rate
options
to
manage
its
exposure
to
fluctuations
in
interest
rates
and
foreign
currency
exchange
rates.
Toyota
primarily
estimates
the
fair
value
of
derivative
financial
instruments
using
industry-standard
valuation
models
that
require
observable
inputs
including
interest
rates
and
foreign
exchange
rates,
and
the
contractual
terms.
The
usage
of
these
models
does
not
require
significant
judgment
to
be
applied.
These
derivative
financial
instruments
are
classified
as
Level
2.
In
other
certain
cases
when
market
data
are
not
available,
key
inputs
to
the
fair
value
measurement
include
quotes
from
counterparties,
and
other
market
data.
Toyota
assesses
the
reasonableness
of
changes
of
the
quotes
using
observable
market
data.
These
derivative
financial
instruments
are
classified
as
Level
3.
Toyota’s
derivative
fair
value
measurements
consider
assumptions
about
counterparty
and
Toyota’s
own
non-performance
risk, using such as credit default
probabilities.
(vi) Short-term and long-term
debt -
The
fair
values
of
short-term
and
long-term
debt
including
the
current
portion,
except
for
secured
loans
provided
by
securitization
transactions
using
special-purpose
entities
(“Loans
Based
on
Securitization”),
are
estimated
based
on
the
discounted
amounts
of
future
cash
flows
using
Toyota’s
current
borrowing
rates
for
similar liabilities.
As these inputs are observable, the
fair value of these debts is
classified as Level 2.
F-61
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
fair
values
of
the
Loans
Based
on
Securitization
is
primarily
estimated
based
on
current
market
rates
and
credit
spreads
for
debt
with
similar
maturities.
Internal
assumptions
including
prepayment
speeds
and
expected
credit
losses
are
used
to
estimate
the
timing
of
cash
flows
to
be
paid
on
the
underlying
securitized
assets.
In
case
these
valuations
utilize
unobservable
inputs,
the
fair
value
of
the
Loans
Based
on
Securitization
is
classified as Level 3.
(3)
Financial
instrument
measured
at
fair
value
on
recurring
basis
The
following
table
summarizes
the
fair
values
of
the
assets
and
liabilities
measured
at
fair
value
on
a
recurring
basis.
Transfers
between
levels
of
the
fair
value
are
recognized
at
the
date
of
the
event
or
change
in
circumstances that caused the
transfer:
Yen
in
millions
March
31,
2021
Level
1
Level
2
Level
3
Total
Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds
................................
22,926
28,269
8,406
59,600
Stocks
................................................
317,101
317,101
Derivative financial instruments
............................
282,364
282,364
Other
.................................................
366,570
123,255
489,824
Total
.............................................
389,495
433,887
325,506
1,148,889
Financial assets measured at fair value through other comprehensive
income
Public and corporate bonds
................................
3,075,042
2,981,239
19,218
6,075,498
Stocks
................................................
2,623,964
321,816
2,945,780
Other
.................................................
7,986
7,986
Total
.............................................
5,706,991
2,981,239
341,034
9,029,264
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments
............................
(425,980)
(425,980)
Total
.............................................
(425,980)
(425,980)
F-62
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2022
Level
1
Level
2
Level
3
Total
Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds
................................
61,376
96,136
1,674
159,186
Stocks
................................................
149,890
149,890
Derivative financial instruments
............................
419,173
419,173
Other
.................................................
307,446
158,355
465,801
Total
.............................................
368,822
673,665
151,563
1,194,051
Financial assets measured at fair value through other comprehensive
income
Public and corporate bonds
................................
3,542,949
2,739,591
20,178
6,302,719
Stocks
................................................
3,162,805
169,404
3,332,209
Other
.................................................
9,505
139
9,644
Total
.............................................
6,715,259
2,739,730
189,583
9,644,571
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments
............................
(497,198)
(497,198)
Total
.............................................
(497,198)
(497,198)
(4)
Changes
in
financial
instruments
classified
as
Level
3
and
measured
at
fair
value
on
recurring
basis
The
following
table
summarizes
the
changes
in
Level
3
assets
and
liabilities
measured
at
fair
value
on
a
recurring basis for the years
ended March 31, 2021 and 2022:
Yen
in
millions
For
the
year
ended
March
31,
2021
Public
and
corporate
bonds
Stocks
Derivative
financial
instruments
Total
Balance at beginning of year
..................
32,931
370,452
403,383
Total gains (losses)
Net income (loss)
......................
9
8
0
162,055
163,035
Other comprehensive income (loss)
........
72,014
72,014
Purchases and issuances
.....................
3
1
6
58,578
58,894
Sales and settlements
.......................
(5,223)
(497)
(5,720)
Transfer from Level 3
.......................
(2,760)
(2,760)
Others
...................................
1,380
(23,686)
(22,306)
Balance at end of year
.......................
27,623
638,917
666,540
Unrealized gains or losses included
in profit or
loss on assets held at March 31
..............
9
8
3
162,055
163,038
Total
............................
9
8
3
162,055
163,038
F-63
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
For
the
year
ended
March
31,
2022
Public
and
corporate
bonds
Stocks
Derivative
financial
instruments
Total
Balance at beginning of year
..................
27,623
638,917
666,540
Total gains (losses)
Net income (loss)
......................
(44)
113,053
113,009
Other comprehensive income (loss)
........
9,219
9,219
Purchases and issuances
.....................
9
6
8
2,362
3,330
Sales and settlements
.......................
(4,020)
(18,208)
(22,228)
Transfer from Level 3
.......................
(7,067)
(512,465)
(519,532)
Others
...................................
4,392
86,415
90,807
Balance at end of year
.......................
21,852
319,294
341,146
Unrealized gains or losses included
in profit or
loss on assets held at March 31
..............
(250)
113,053
112,803
Total
................................
(250)
113,053
112,803
Net
income
(loss)
in
public
and
corporate
bonds,
stocks
and
derivative
financial
instruments,
other
than
transactions
related
to
financial
services,
are
each
included
in
“Other
finance
income”
and
“Other
finance
costs”
in
the
accompanying
consolidated
statement
of
income.
Transactions
related
to
financial
services
are
included
in
each
of
“Sales
revenues—Financial
services”
and
“Cost
of
financial
services”
in
the
consolidated
statement
of
income.
In
the
reconciliation
table
above,
derivative
financial
instruments
are
presented
as
net
of
assets
and
liabilities.
“Other”
includes
foreign
currency
translation
adjustments
for
the
year
ended
March
31,
2021
and
2022.
Transfer
from
Level
3
of
stocks
recognized
in
the
year
ended
March
31,
2022
is
due
to
the
listing
of
investees.
(5)
Financial
assets
and
liabilities
measured
at
amortized
cost
The
following
table
summarizes
the
carrying
amount
and
the
fair
value
of
financial
assets
and
liabilities
measured on an amortized cost basis:
Yen
in
millions
March
31,
2021
Fair
value
Carrying
amount
Level
1
Level
2
Level
3
Total
Receivables related to financial
services
.....
19,205,715
19,939,810
19,939,810
Interest-bearing liabilities
Long-term debt (Including current
portion)
........................
20,718,142
17,749,022
3,244,912
20,993,934
F-64
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
March
31,
2022
Fair
value
Carrying
amount
Level
1
Level
2
Level
3
Total
Receivables related to financial
services
.....
21,764,457
22,074,593
22,074,593
Interest-bearing liabilities
Long-term debt (Including current
portion)
........................
21,970,573
17,899,087
3,824,531
21,723,618
Of
financial
assets
and
liabilities
that
are
measured
on
an
amortized
cost
basis,
those
with
carrying
values
that approximate fair value
are excluded from the table
above.
22.
Offsetting
Financial
Assets
and
Liabilities
The following
table summarizes
the
amounts of
financial assets
and financial
liabilities
that are subject
to an
enforceable
master
netting
agreement
or
similar
agreement
but
not
set
off
because
they
do
not
meet
some
or
all
of
the
offsetting
criteria
for
financial
assets
and
financial
liabilities.
With
respect
to
financial
instruments
that
may
be
offset
in
the
future
based
on
set-off
rights
associated
with
master
netting
agreements
or
similar
agreements,
as
well
as
the
associated
collateral,
the
set-off
will
be
enforceable
only
when
certain
circumstances,
such as when the counterparty cannot perform
on its obligations due to bankruptcy
or other reasons, arise.
Yen
in
millions
March
31,
2021
Gross
amounts
of
recognized
financial
assets
and
financial
liabilities
Amounts
not
offset
Net
amount
Financial
instruments
Collateral
of
financial
instruments
Other financial assets Derivatives
...................
282,364
(163,054)
(62,795)
56,515
Other financial liabilities
Derivatives
................
425,980
(163,054)
(89,849)
173,078
Yen
in
millions
March
31,
2022
Gross
amounts
of
recognized
financial
assets
and
financial
liabilities
Amounts
not
offset
Net
amount
Financial
instruments
Collateral
of
financial
instruments
Other financial assets Derivatives
...................
419,173
(182,288)
(105,201)
131,685
Other financial liabilities
Derivatives
................
497,198
(182,288)
(111,283)
203,627
The
amounts
offset,
as
presented
in
the
consolidated
statement
of
financial
position,
in
accordance
with
the
criteria for offsetting
financial assets and financial
liabilities
were immaterial.
23.
Employee
benefits
(1)
Overview
of
post-employment
benefit
Plans
Upon
terminations
of
employment,
employees
of
TMC
and
subsidiaries
in
Japan
are
entitled,
under
the
retirement
plans
of
each
company,
to
lump-sum
indemnities
or
pension
payments,
based
on
current
rates
of
pay
and
lengths
of
service
or
the
number
of
“points”
mainly
determined
by
those.
Under
normal
circumstances,
the
minimum
payment
prior
to
retirement
age
is
an
amount
based
on
voluntary
retirement.
Employees
receive
additional benefits on involuntary
retirement, including
retirement at the age limit.
F-65
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Effective
October 1,
2004, TMC
amended
its
retirement
plan to
introduce
a
“point” based
retirement
benefit
plan.
Under
the
new
plan,
employees
are
entitled
to
lump-sum
or
pension
payments
determined
based
on
accumulated “points” vested in
each year of service.
There are three
types of “points”
that vest in each year of service
consisting of “service period
points” which
are attributed
to
the
length
of service,
“job
title
points”
which are
attributed
to
the job
title
of
each employee,
and
“performance points”
which are
attributed
to the
annual performance
evaluation
of each employee.
Under normal
circumstances,
the
minimum
payment
prior
to
retirement
age
is
an
amount
reflecting
an
adjustment
rate
applied
to
represent
voluntary
retirement.
Employees
receive
additional
benefits
upon
involuntary
retirement,
including
retirement at the age limit.
Effective
October
1,
2005,
TMC
partly
amended
its
retirement
plan
and
introduced
the
quasi
cash-balance
plan
under
which
benefits
are
determined
based
on
the
variable-interest
crediting
rate
rather
than
the
fixed-
interest crediting rate
as was in the pre-amended plan.
TMC
and
most
subsidiaries
in
Japan
have
contributory
funded
defined
benefit
pension
plans,
which
are
pursuant
to
the
Corporate
Defined
Benefit
Pension
Plan
Law
(CDBPPL).
The
contributions
to
the
plans
are
funded
with
several
financial
institutions
in
accordance
with
the
applicable
laws
and
regulations.
These
pension
plan assets consist principally
of common stocks, government bonds and
insurance contracts.
Most foreign subsidiaries
have pension
plans or severance
indemnity plans
covering substantially
all of
their
employees
under
which
the
cost
of
benefits
are
currently
invested
or
accrued.
The
benefits
for
these
plans
are
based primarily on lengths of service
and current rates of pay.
These
post-employment
benefit
plans
are
exposed
to
general
investment
risk,
interest
rate
risk
and
inflation
risk.
Pension
costs
and
defined
benefit
obligations
are
dependent
on
assumptions
used
in
calculating
such
amounts.
These assumptions
include discount
rates,
retirement
rate,
salary
increase
rate,
mortality
rates
and other
factors.
While
management
believes
that
the
assumptions
used
are
appropriate,
differences
in
actual
experience
or changes in assumptions may affect
Toyota’s pension costs and obligations.
The
most
critical
assumption
impacting
the
calculation
of
pension
costs
and
defined
benefit
obligations
is
the
discount
rates.
Toyota
determines
the
discount
rates
mainly
based
on
the
rates
of
high
quality
fixed
income
bonds
currently
available
and
expected
to
be
available
during
the
period
to
maturity
of
the
defined
benefit
pension plans.
Toyota uses a March 31 measurement date
for its post-employment
benefit plans.
F-66
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(2)
Defined
benefit
obligations
and
plan
assets
The changes in present value of defined
benefit obligations and fair
value of plan assets are as follows:
Yen
in
millions
For
the
years
ended
March
31,
2021
2022
Japanese
plans
Foreign
plans
Japanese
plans
Foreign
plans
Present value of defined benefit
obligations:
Benefit obligations at beginning of
year
........
2,058,893
1,207,815
2,089,263
1,419,910
Current service cost
.......................
91,079
52,334
89,128
52,826
Interest cost
..............................
10,970
49,914
12,487
52,062
Remeasurements:
Changes in demographic assumptions
.....
(7,569)
28,690
6,440
379
Changes in financial assumptions
.........
13,888
14,490
(46,113)
(126,125)
Other
...............................
(5,835)
51,296
4,162
904
Past service cost
..........................
1,035
3,159
761
274
Plan participants’ contributions
..............
1,397
2,093
1,392
3,063
Benefits paid
.............................
(72,441)
(48,478)
(80,368)
(42,615)
Acquisition and other
......................
(2,155)
58,597
126,966
Benefit obligations at end of year
.............
2,089,263
1,419,910
2,077,151
1,487,644
Fair value of plan assets:
Plan assets at beginning of year
..............
1,519,254
868,903
1,806,265
1,079,543
Interest income
...........................
8,907
48,729
11,261
51,614
Remeasurement
Actual return on plan assets, excluding
interest income
.....................
286,089
120,232
34,543
(6,657)
Employer contributions
....................
37,469
31,227
33,163
24,912
Plan participants’ contributions
..............
1,397
2,093
1,392
3,063
Benefits paid
.............................
(39,471)
(36,217)
(41,804)
(31,823)
Acquisition and other
......................
(7,380)
44,576
104,004
Plan assets at end of year
...................
1,806,265
1,079,543
1,844,819
1,224,656
Effect of the asset ceiling
.......................
Net defined benefit liability
(asset)
...............
282,999
340,368
232,332
262,988
The funded defined benefit obligations
and the unfunded defined benefit obligations
are as follows:
Yen
in
millions
March
31,
2021
2022
Japanese
plans
Foreign
plans
Japanese
plans
Foreign
plans
Funded defined benefit obligations
....................
1,575,647
1,127,974
1,559,686
1,187,595
Plan assets
.......................................
(1,806,265)
(1,079,543)
(1,844,819)
(1,224,656)
Subtotal
.........................................
(230,618)
48,432
(285,133)
(37,061)
Unfunded defined benefit obligations
..................
513,616
291,936
517,465
300,049
Total
........................................
282,999
340,368
232,332
262,988
F-67
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
net
defined
benefit
liability
(asset)
recognized
in
the
consolidated
statement
of
financial
position
are
comprised of the following:
Yen
in
millions
March
31,
2021
2022
Japanese
plans
Foreign
plans
Japanese
plans
Foreign
plans
Retirement benefit liabilities
.........................
680,021
355,075
674,425
348,323
Other non-current assets (Retirement
benefit assets)
......
(397,023)
(14,707)
(442,094)
(85,335)
Net amount recognized
.........................
282,999
340,368
232,332
262,988
(3)
The
major
items
of
actuarial
assumption
The
weighted-average
discount
rates
used
to
determine
the
present
value
of
defined
benefit
obligations
are
as follows:
March
31,
2021
2022
Japanese
plans
Foreign
plans
Japanese
plans
Foreign
plans
Discount rate
....................................
0.6%
3.3%
0.7%
3.5%
(4)
Fair
value
of
plan
assets
Toyota’s
policy
and
objective
for
plan
asset
management
is
to
maximize
returns
on
plan
assets
to
meet
future
benefit
payment
requirements
under
risks
which
Toyota
considers
permissible.
Asset
allocations
under the
plan
asset
management
are
determined
based
on
plan
asset
management
policies
of
each
plan
which
are
established
to achieve
the
optimized
asset compositions
in terms
of
the long-term
overall
plan asset
management.
When
actual
allocations
are
not
in
line
with
target
allocations,
Toyota
rebalances
its
investments
in
accordance
with
the
policies.
Prior
to
making
individual
investments,
Toyota
performs
in-depth
assessments
of
corresponding
factors
including
category
of
products,
industry
type,
currencies
and
liquidity
of
each
potential
investment
under
consideration
to
mitigate
concentrations
of
risks
such
as
market
risk
and
foreign
currency
exchange
rate
risk.
To
assess
performance
of
the
investments,
Toyota
establishes
bench
mark
return
rates
for
each
individual
investment,
combines
these
individual
bench
mark
rates
based
on
the
asset
composition
ratios
within
each
asset
category,
and
compares
the
combined
rates
with
the
corresponding
actual
return
rates
on
each
asset category.
F-68
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The following table summarizes
the fair value of classes of
plan assets.
Yen
in
millions
March
31,
2021
Japanese
plans
Foreign
plans
Quoted
prices
in
active
markets
Total
Quoted
prices
in
active
markets
Total
Available
Not
available
Available
Not
available
Stocks
..........................
607,727
607,727
194,927
194,927
Government bonds
................
110,699
110,699
113,476
113,476
Bonds (other)
.....................
72,496
72,496
203,640
203,640
Commingled funds
................
500,243
500,243
385,663
385,663
Insurance contracts
................
216,423
216,423
Other
...........................
145,801
152,876
298,677
16,182
165,655
181,837
Total
.......................
864,227
942,038
1,806,265
324,584
754,958
1,079,543
Yen
in
millions
March
31,
2022
Japanese
plans
Foreign
plans
Quoted
prices
in
active
markets
Total
Quoted
prices
in
active
markets
Total
Available
Not
available
Available
Not
available
Stocks
..........................
549,385
549,385
195,067
195,067
Government bonds
................
112,568
112,568
132,172
132,172
Bonds (other)
.....................
77,048
77,048
218,433
218,433
Commingled funds
................
489,471
489,471
423,525
423,525
Insurance contracts
................
220,027
220,027
Other
...........................
225,980
170,340
396,320
30,442
225,016
255,459
Total
.......................
887,933
956,886
1,844,819
357,681
866,975
1,224,656
“Other” consists of cash equivalents,
other private placement
investment funds and other assets.
(5)
The
sensitivity
analysis
The
following
table
illustrates
the
effects
on
defined
benefit
obligations
of
the
change
in
weighted-average
discount rates, assuming all
other assumptions are consistent.
Yen
in
millions
March
31,
2021
2022
Japanese
plans
Foreign
plans
Japanese
plans
Foreign
plans
0.5% decrease
.......................................
177,741
99,253
172,402
127,889
0.5% increase
.......................................
(154,265)
(179,276)
(150,226)
(118,899)
(6)
Impact
on
future
cash
flow
Contributions
to
plan
assets
by
TMC
and
some
of
its
consolidated
subsidiaries
are
determined
by
various
factors
such
as
employee
salary
levels
and
years
of
service,
funded
status
of
plan
assets,
and
actuarial
F-69
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
calculations.
In
addition,
according
to
the
rules
of
the
defined
benefit
corporate
pension
law,
the
corporate
pension
fund
system
recalculates
the
amount
of
the
balance
every
five
years
with
the
end
date
of
the
reporting
period
as
the
base
date
so
that
financial
balance
can
be
maintained
in
the
future.
TMC
and
some
of
its
consolidated subsidiaries
may make a
necessary contribution
if the reserve
amount is below the minimum
reserve
amount.
In
the
following
year
(the
year
ending
March
31,
2023),
Toyota
expects
to
contribute
¥33,069
million
for
Japanese plans and ¥14,876 million for
Foreign plans to the post-employment
benefit plans.
The
following
pension
benefit
payments,
which
reflect
expected
future
service,
as
appropriate,
are
expected
to be paid:
Yen
in
millions
Years
ending
March
31,
Japanese
plans
Foreign
plans
2023
...............................................................
84,168
43,910
2024
...............................................................
86,656
43,958
2025
...............................................................
83,842
45,661
2026
...............................................................
85,239
48,557
2027
...............................................................
88,955
52,725
From 2028 to 2032
....................................................
421,154
301,917
Total
...........................................................
850,015
536,727
(7)
Benefit
obligations
for
non-retirement
pension
for
retirees
and
benefit
obligations
for
absentee
Toyota’s
U.S.
subsidiaries
provide
certain
health
care
and
life
insurance
benefits
to
eligible
retired
employees.
In
addition,
Toyota
provides
benefits
to
certain
former
or
inactive
employees
after
employment,
but
before
retirement.
These
benefits
are
provided
through
various
insurance
companies,
health
care
providers
and
others.
The
costs
of
these
benefits
are
recognized
over
the
period
the
employee
provides
credited
service
to
Toyota. Toyota’s obligation under these arrangements
are not material.
(8)
Payroll
expenses
Payroll
expenses
included
in
“Cost
of
products
sold”
and
“Selling,
general
and
administrative”
in
the
consolidated
statement
of
income
(including
expenses
for
post-employment
benefit
plans)
for
the
years
ended
March 31, 2020, 2021 and 2022 are ¥3,403,555 million, ¥3,281,292 million
and ¥3,550,882 million, respectively.
24.
Liabilities
for
quality
assurance
Toyota
provides
product
warranties
for
certain
defects
mainly
resulting
from
manufacturing
based
on
warranty
contracts
with
its
customers
at
the
time
of
sale
of
products.
Toyota
accrues
estimated
warranty
costs
to
be
incurred
in
the
future
in
accordance
with
the
warranty
contracts.
In
addition
to
product
warranties,
Toyota
initiates
recalls
and
other
safety
measures
to
repair
or
to
replace
parts
which
might
be
expected
to
fail
from
products
safety
perspectives
or
customer
satisfaction
standpoints.
Toyota
accrues
for
costs
of
recalls
and
other
safety measures based on the amount
estimated from historical
experience.
Liabilities
for
product
warranties
and
liabilities
for
recalls
and
other
safety
measures
have
been
combined
into “Liabilities
for
quality
assurance”
in
the consolidated
statement
of
financial
position
due
to the
fact
that both
are
liabilities
for
costs
to
repair
or
replace
defects
of
vehicles
and
the
amounts
incurred
for
recalls
and
other
safety measures may affect
the amounts incurred for product
warranties and vice versa.
F-70
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The net
change
in liabilities
for
quality
assurance
above
for the
years
ended
March 31,
2020,
2021 and
2022
consist of the following:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Liabilities for quality
assurance at beginning of year
..............
1,769,514
1,552,970
1,482,872
Additional provisions
......................................
372,619
345,563
362,180
Utilization
...............................................
(482,918)
(347,806)
(278,094)
Reversals
................................................
(99,533)
(77,479)
(32,124)
Other
...................................................
(6,712)
9,624
20,877
Liabilities for quality
assurance at end of year
...................
1,552,970
1,482,872
1,555,711
“Other”
primarily
includes
the
impact
of
currency
translation
adjustments
and
the
impact
of
consolidation
and deconsolidation of certain entities
due to changes in ownership interest.
The
table
below
shows
the
net
changes
in
liabilities
for
recalls
and
other
safety
measures
which
are
comprised in liabilities
for quality assurance above for
the years ended March 31, 2020, 2021 and 2022.
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Liabilities for recalls
and other safety measures at
beginning of
year
..................................................
1,302,309
1,104,711
1,093,689
Additional provisions
......................................
225,373
229,763
245,542
Utilization
...............................................
(354,759)
(228,044)
(165,482)
Reversals
................................................
(61,099)
(16,199)
(9,389)
Other
...................................................
(7,113)
3,458
6,853
Liabilities for recalls
and other safety measures at
end of year
......
1,104,711
1,093,689
1,171,213
25.
Equity
and
other
equity
items
(1)
Equity
management
Toyota
will
efficiently
invest
in
maintenance
and
replacement
of
conventional
manufacturing
facilities
and
the
introduction
of
new
products,
and
will
focus
on
capital
investment
and
research
and
development
in
areas
contributing
to
strengthening
competitiveness
and
future
growth.
Through
these
activities,
Toyota
aims
to
improve corporate
value and keep sustainable
growth for
realization of
a new mobility society.
Generally, Toyota
Motor
Corporation
shareholder’s
equity
cover
such
activities,
with
additional
short-term
and
long-term
debt,
if
necessary.
The
amount
of
Toyota
Motor
Corporation
shareholder’s
equity
and
short-term
and
long-term
debt
are
as
follows:
Yen
in
millions
March
31,
2021
2022
Toyota Motor Corporation Shareholders’
equity
............................
23,404,547
26,245,969
Short-term and long-term debt
..........................................
25,659,635
26,496,358
F-71
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(2)
Number
of
shares
The
total
number
of
authorized
shares
of
TMC’s
common
stock
was
10,000,000,000,
10,000,000,000
and
50,000,000,000 as of March 31, 2020, 2021 and 2022, respectively.
The changes in the shares of common stock
issued are as follows:
For
the
years
ended
March
31,
2020
2021
2022
Common stock issued:
Balance at beginning of year
......................
3,262,997,492
3,262,997,492
3,262,997,492
Changes during the year
..........................
13,051,989,968
Balance at end of year
.......................
3,262,997,492
3,262,997,492
16,314,987,460
The
common
stock
issued
by
TMC
is
a
no-parity
stock
without
any
limitations
on
the
content
of
the
rights,
and the issued stock is fully paid.
On
October
1,
2021,
TMC
effected
a
five-for-one
stock
split
of
its
common
stock
to
shareholders.
The
total
number
of
authorized
shares
of
TMC’s
common
stock
and
common
stock
issued
was
increased
by
40,000,000,000 and 13,051,989,968, respectively.
The
total
number
of
treasury
stock
was
496,844,960,
467,048,832
and
2,536,685,916
as
of
March
31,
2020,
2021 and 2022, respectively.
(3)
Capital
surplus
and
retained
earnings
Capital
surplus
consists
of
capital
reserves
and
other
capital
surplus.
Retained
earnings
consist
of
retained
earnings
reserve
and
other
retained
earnings.
The
Companies
Act of
Japan
provides
that
an
amount
equal
to
10%
of
distributions
from
surplus
paid
by
TMC
and
its
Japanese
subsidiaries
be
appropriated
as
a
capital
reserve
or
a
retained
earnings
reserve.
No
further
appropriations
are
required
when the
total
amount
of the
capital
reserve
and
the
retained
earnings
reserve
reaches
25%
of
stated
capital.
The
Companies
Act
provides
that
the
retained
earnings
reserve
of
TMC
and
its
Japanese
subsidiaries
is
restricted
and
unable
to
be
used
for
dividend
payments,
and is excluded from the calculation
of the profit available
for dividend.
The
amounts
of
statutory
retained
earnings
of
TMC
available
for
dividend
payments
to
shareholders
were
¥11,215,850
million
and
¥11,656,187
million
as
of
March
31,
2021
and
2022,
respectively.
In
accordance
with
customary
practice
in
Japan,
the
distributions
from
surplus
are
not
accrued
in
the
financial
statements
for
the
corresponding period,
but
are
recorded
in the
subsequent accounting
period
after shareholders’
approval
has been
obtained.
Retained
earnings
at
March
31,
2022
include
¥3,243,920
million
relating
to equity
in
undistributed
earnings
of associates and joint ventures.
(4)
Treasury
stock
The reissuance and repurchase of treasury
stock are as follows:
For the year ended March 31, 2020
Repurchase
of
treasury
stock
F-72
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Reason
for
repurchasing
treasury
stock
-
The
repurchase
was
made
to
return
capital
to
shareholders
in
addition
to
promoting
capital
efficiency
and
agile capital policy in view of
the business environment.
Details
of
matters
relating
to
repurchase
-
Number of common shares repurchased
.........................
69,532,900 shares
Total purchase price for repurchase
of shares
.....................
¥500,139 million
Reissuance
of
treasury
stock
Reason
for
reissuing
treasury
stock
-
On
May
9,
2019,
TMC
resolved
to
conclude
contracts
aimed
toward
the
establishment
of
a
new
joint
venture,
Prime
Life
Technologies,
related
to
a
town
development
business
with
Panasonic.
Pursuant
to
these
contracts,
TMC,
THC
and
Misawa
Homes
conducted
a
share
exchange
in
which
common
shares
of
Toyota
were
allotted
in
exchange
for
common
shares
of
Misawa
Homes
so
that
THC,
a
consolidated
subsidiary
of
TMC,
will
become
the
wholly
owning
parent
company
resulting
from
the
share
exchange
and
Misawa
Homes,
a
consolidated subsidiary of THC, will become
the wholly owned subsidiary resulting from
the share exchange.
Details
of
matters
relating
to
reissuance
-
Number of common shares reissued
............................
3,269,500 shares
Amount of reissuance
........................................
¥24,181 million
For the year ended March 31, 2021
Reissuance
of
treasury
stock
Reason
for
reissuing
treasury
stock
-
At
its
Directors’
Meeting
held
on
March
24,
2020,
TMC
resolved
to
purchase
shares
issued
by
NIPPON
TELEGRAPH
AND
TELEPHONE
CORPORATION
(“NTT”)
and
conduct
a
reissuance
of
treasury
stock
through
third-party
allotment
with
NTT
as
the
allottee
to
form
a
business
and
capital
alliance
with
NTT.
The
parties
entered
into
a
memorandum
of
understanding
concerning
the
business
and
capital
alliance
on
the
same
day.
Based
on
the
agreement,
TMC
has
completed
the
purchase
of
NTT
shares
and
reissuance
of
treasury
stock
with NTT as the allottee on April 9, 2020.
Details
of
matters
relating
to
reissuance
-
Number of common shares reissued
............................
29,730,900 shares
Amount of reissuance
........................................
¥199,999 million
For the year ended March 31, 2022
Repurchase
of
treasury
stock
1)
Repurchasing
of
treasury
stock
resolved
at
the
Board
of
Directors
meeting
held
on
May
12,
2021
and
November 4, 2021
F-73
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Reason
for
repurchasing
treasury
stock
-
The
repurchase
was
made
to
promote
capital
efficiency
by
repurchasing
flexibly
its
common
stock
while
comprehensively considering
factors
such as
its investment
in
growth, level
of its dividends,
its cash
reserves and
the price level of its common
stock.
Details
of
matters
relating
to
repurchase
-
Number of common shares repurchased
.........................
96,196,900 shares
Total purchase price for repurchase
of shares
.....................
¥400,000 million
2) Repurchasing of treasury stock resolved
at the Board of Directors meeting
held on March 23, 2022
Reason
for
repurchasing
treasury
stock
-
The
repurchase
was
made
to
promote
capital
efficiency
by
repurchasing
flexibly
its
common
stock
than
before while comprehensively considering
factors such as the price
level of its common stock.
Details
of
matters
relating
to
repurchase
-
Number of common shares repurchased
.........................
2,111,000 shares
Total purchase price for repurchase
of shares
.....................
¥4,607 million
F-74
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(5)
Other
components
of
equity
Other components of equity are as follows:
Yen
in
millions
Net
changes
in
revaluation
of
financial
assets
measured
at
fair
value
through
other
comprehensive
income
Remeasurements
of
defined
benefit
plans
Exchange
differences
on
translating
foreign
operations
Total
Balance at April 1, 2019
.................
1,016,035
1,016,035
Other comprehensive income, net of
t
a
x
............................
(58,946)
(54,176)
(395,523)
(508,645)
Reclassification to retained
earnings
. . .
(4,935)
55,580
50,644
Other comprehensive income for the
period attributable to non-controlling
interests
........................
1,916
(1,404)
27,002
27,514
Balance at March 31, 2020
...............
954,070
(368,520)
585,549
Other comprehensive income, net of
t
a
x
............................
380,814
221,409
410,253
1,012,476
Reclassification to retained
earnings
. . .
(31,321)
(219,047)
(250,369)
Other comprehensive income for the
period attributable to non-controlling
interests
........................
(8,211)
(2,362)
(29,357)
(39,930)
Balance at March 31, 2021
...............
1,295,351
12,375
1,307,726
Other comprehensive income, net of
t
a
x
............................
(103,131)
151,243
1,095,017
1,143,129
Reclassification to retained
earnings
. . .
(59,110)
(149,602)
(208,712)
Other comprehensive income for the
period attributable to non-controlling
interests
........................
1,561
(1,640)
(38,810)
(38,889)
Balance at March 31, 2022
...............
1,134,671
1,068,583
2,203,254
F-75
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(6)
Other
comprehensive
income
The
breakdown
of
other
comprehensive
income
and
the
corresponding
tax
benefits
(including
non-controlling interests)
are as follows:
Yen
in
millions
For
the
year
ended
March
31,
2020
Before
tax
Tax
effect
After
tax
Items that will not be reclassified
to profit (loss)
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
(353,261)
109,409
(243,853)
Net changes
.............................................
(353,261)
109,409
(243,853)
Remeasurements of defined benefit
plans
Amount incurred during the year
.............................
(48,426)
5,026
(43,399)
Net changes
.............................................
(48,426)
5,026
(43,399)
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
62,568
62,568
Net changes
.............................................
62,568
62,568
Items that may be reclassified
subsequently to profit
(loss)
Exchange differences on translating
foreign operations
Amount incurred during the year
.............................
(390,427)
(390,427)
Reclassification to profit
(loss)
...............................
28,329
28,329
Net changes
.............................................
(362,098)
(362,098)
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
141,795
(43,367)
98,427
Reclassification to profit
(loss)
...............................
20,380
(5,417)
14,963
Net changes
.............................................
162,174
(48,784)
113,390
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
(35,253)
(35,253)
Reclassification to profit
(loss)
...............................
Net changes
.............................................
(35,253)
(35,253)
Total other comprehensive income
...................................
(574,296)
65,651
(508,645)
F-76
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
For
the
year
ended
March
31,
2021
Before
tax
Tax
effect
After
tax
Items that will not be reclassified
to profit (loss)
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
560,225
(172,798)
387,427
Net changes
.............................................
560,225
(172,798)
387,427
Remeasurements of defined benefit
plans
Amount incurred during the year
.............................
311,360
(95,087)
216,272
Net changes
.............................................
311,360
(95,087)
216,272
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
80,472
80,472
Net changes
.............................................
80,472
80,472
Items that may be reclassified
subsequently to profit
(loss)
Exchange differences on translating
foreign operations
Amount incurred during the year
.............................
403,636
403,636
Reclassification to profit
(loss)
...............................
Net changes
.............................................
403,636
403,636
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
(119,441)
35,938
(83,503)
Reclassification to profit
(loss)
...............................
Net changes
.............................................
(119,441)
35,938
(83,503)
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
8,172
8,172
Reclassification to profit
(loss)
...............................
Net changes
.............................................
8,172
8,172
Total other comprehensive income
...................................
1,244,424
(231,947)
1,012,476
F-77
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Yen
in
millions
For
the
year
ended
March
31,
2022
Before
tax
Tax
effect
After
tax
Items that will not be reclassified
to profit (loss)
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
(71,641)
22,399
(49,242)
Net changes
.............................................
(71,641)
22,399
(49,242)
Remeasurements of defined benefit
plans
Amount incurred during the year
.............................
188,239
(51,989)
136,250
Net changes
.............................................
188,239
(51,989)
136,250
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
113,641
113,641
Net changes
.............................................
113,641
113,641
Items that may be reclassified
subsequently to profit
(loss)
Exchange differences on translating
foreign operations
Amount incurred during the year
.............................
902,844
902,844
Reclassification to profit
(loss)
...............................
Net changes
.............................................
902,844
902,844
Net changes in revaluation of financial
assets measured at fair
value
through other comprehensive income
Amount incurred during the year
.............................
(220,711)
66,536
(154,175)
Reclassification to profit
(loss)
...............................
1
(
0
)
1
Net changes
.............................................
(220,710)
66,536
(154,174)
Shares of other comprehensive income
of equity method investees
Amount incurred during the year
.............................
193,811
193,811
Reclassification to profit
(loss)
...............................
Net changes
.............................................
193,811
193,811
Total other comprehensive income
...................................
1,106,184
36,945
1,143,129
F-78
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
(7)
Dividends
The paid dividend amounts are as follows:
For the year ended March 31, 2020
Resolution
Type
of
shares
Total
amount
of
dividends
(yen
in
millions)
Dividend
per
share
(yen)
Record
date
Effective
date
The Board of
Directors Meeting
on May 8,
2019
..........
Common shares
339,893
120.00
March 31, 2019
May 24, 2019
The Board of
Directors Meeting
on November 7,
2019
..........
Common shares
278,908
100.00
September 30, 2019
November 27, 2019
For the year ended March 31, 2021
Resolution
Type
of
shares
Total
amount
of
dividends
(yen
in
millions)
Dividend
per
share
(yen)
Record
date
Effective
date
The Board of
Directors Meeting
on May 12,
2020
...........
Common shares
331,938
120.00
March 31, 2020
May 28, 2020
The Board of
Directors Meeting
on November 6,
2020
...........
Common shares
293,576
105.00
September
30, 2020
November 27, 2020
For the year ended March 31, 2022
Resolution
Type
of
shares
Total
amount
of
dividends
(yen
in
millions)
Dividend
per
share
(yen)
Record
date
Effective
date
The Board of
Directors Meeting
on May 12,
2021
...........
Common shares
377,453
135.00
March 31, 2021
May 28, 2021
The Board of
Directors Meeting
on November 4,
2021
...........
Common shares
332,419
120.00
September
30, 2021
November 25, 2021
F-79
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
Dividends
of
which
record
date
falls
within
the
year
ended
March
31,
and
effective
date
is
after
the
year
ended March 31 are as follows:
For the year ended March 31, 2022
Resolution
Type
of
shares
Total
amount
of
dividends
(yen
in
millions)
Dividend
per
share
(yen)
Record
date
Effective
date
The Board of
Directors Meeting
on May 11,
2022
...........
Common shares
385,792
28.00
March 31, 2022
May 27, 2022
On
October
1,
2021,
TMC
effected
a
five-for-one
stock
split
of
its
common
stock
to
shareholders.
The
dividend
per
share
amount
based
on
the
Board
of
Directors
Meeting
on
November
4,
2021
is
an
amount
before
the
stock
split.
The
dividend
per
share
amount
based
on
the
Board
of
Directors
Meeting
on
May
11,
2022
is
an
amount after the stock split.
26.
Sales
revenues
(1)
Summary
by
business
segments
and
products
The
table
below
shows
Toyota’s
sales
revenues
from
external
customers
by
business
and
by
product
category.
Yen
in
millions
For
the
years
ended
March
31
2020
2021
2022
Sales of products
Automotive
Vehicles
........................................
22,647,701
20,509,606
23,739,442
Parts and components for production
.................
1,197,089
1,287,053
1,504,215
Parts and components for after
service
................
2,170,448
2,049,187
2,407,143
Other
..........................................
755,141
752,000
881,193
Total automotive
.............................
26,770,379
24,597,846
28,531,993
All other
............................................
923,314
479,553
541,436
Total sales of products
.........................
27,693,693
25,077,398
29,073,428
Financial services
........................................
2,172,854
2,137,195
2,306,079
Total sales revenues
......................
29,866,547
27,214,594
31,379,507
The
majority
of
sales
of
products
are
revenues
recognized
from
contracts
with
customers
under
IFRS
15
“Revenue
from
Contracts
with
Customers”
(“IFRS
15”),
and
receivables
related
to
such
revenues
are
recognized
as “Trade accounts and other receivables”.
F-80
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The breakdown of income from leases included
in financial service revenues
is as follows:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Finance leases
Financial income related to
net lease investment
............
98,865
106,724
134,512
Operating leases
.........................................
1,051,822
1,017,707
1,093,545
Total
..........................................
1,150,688
1,124,431
1,228,057
Financial
service
revenues
other
than
income
from
leases
mainly
consist
of
interest
income
using
the
effective interest method.
The amount of interest income
using the effective interest
method is not significant.
For
the
years
ended
March
31,
2020,
2021
and
2022
¥127,113
million,
¥125,748
million
and
¥138,718 million of financial service
revenues were accounted for under
IFRS 15.
(2)
Contract
liabilities
Contract liabilities consist
of the following:
Yen
in
millions
March
31,
2021
2022
Contract liabilities
..........................................................
854,679
989,959
Contract
liabilities
are
primarily
related
to
advances
received
from
customers.
Contract
liabilities
are
included
in
“Other
current
liabilities”
and
“Other
non-current
liabilities”
in
the
consolidated
statement
of
financial
position.
For
the
year
ended
March
31,
2021
and
2022,
the
amounts
transferred
from
contract
liabilities
at the beginning of the fiscal
year to operating income were ¥370,278 million
and ¥444,781 million, respectively.
(3)
Performance
obligations
The
aggregate
amounts
of
transaction
prices
allocated
to
unsatisfied
performance
obligations
related
to
contracts that
have original
expected durations in
excess of one
year were ¥618,668 million
and ¥796,769
million
as
of
March
31,
2021
and
2022,
respectively.
The
main
contents
of
unsatisfied
performance
obligations
are
insurance revenues and maintenance
revenues.
For
insurance
revenues,
Toyota
receives
payment
agreed
upon
in
the
contract
at
the
inception
of
the
contract,
and
revenue
is
recognized
over
the
term
of
the
contract,
which
ranges
from
three
to
120
months.
As
of
March
31,
2021,
the
unsatisfied
performance
obligations
related
to
insurance
revenues
were
¥237,805
million,
and
Toyota
expected
to
recognize
as
revenue
¥67,537
million
in
fiscal
2022,
and
¥170,268
million
thereafter.
As
of
March
31,
2022,
the
unsatisfied
performance
obligations
related
to insurance
revenues were
¥295,648
million,
and Toyota expects to recognize as revenue
¥82,215 million in fiscal 2023, and ¥213,432 million
thereafter.
For
maintenance
revenues,
Toyota
receives
payments
agreed
upon
in
the
contract
at
the
inception
of
the
contract, and revenue is recognized
over the term of the contract,
which ranges from 18 to 84 months.
Unsatisfied
performance
obligations
for
sales
of
products
related
to
contracts
that
have
an
original
expected
duration of one year or less have been
excluded from this disclosure.
F-81
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
27.
Research
and
development
cost
Research and development costs consist
of the following:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Research and development expenditures
incurred during the year
.........
1,110,369
1,090,424
1,124,262
Amount capitalized
.............................................
(164,127)
(158,246)
(200,512)
Amortization of capitalized
development costs
.......................
149,776
152,542
167,926
Total
....................................................
1,096,019
1,084,721
1,091,675
28.
Other
finance
income
and
costs
Other finance income and costs consist
of the following:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Other finance income
Interest income
Financial assets measured at
amortized cost
..................
37,201
17,526
16,920
Financial assets measured at
fair value through other
comprehensive income
................................
84,629
88,074
84,592
Dividend income
Financial assets measured at
fair value through other
comprehensive income
................................
110,243
88,837
94,833
Other
....................................................
73,772
240,791
138,416
Total
............................................
305,846
435,229
334,760
Other finance costs
Interest expense
Financial liabilities
measured at amortized cost
...............
(44,114)
(42,421)
(32,458)
Other
....................................................
(3,041)
(5,116)
(11,539)
Total
............................................
(47,155)
(47,537)
(43,997)
The
decrease
in
“Other
finance
income—Other”
was
due
mainly
to
a
decrease
during
fiscal
2022
in
profit
on sales of securities.
F-82
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
29.
Earnings
per
share
Reconciliation
of
the
difference
between
basic
and
diluted
earnings
per
share
attributable
to
Toyota
Motor
Corporation are as follows:
Yen
in
millions
Thousands
of
shares
Yen
Net
income
attributable
to
Toyota
Motor
Corporation
Weighted-average
common
shares
Earnings
per
share
attributable
to
Toyota
Motor
Corporation
For
the
year
ended
March
31,
2020
Net income attributable to Toyota
Motor
Corporation
.............................
2,036,140
Basic earnings per share attributable
to Toyota
Motor Corporation
....................
2,036,140
13,994,590
145.49
Effect of dilutive securities
Model AA Class Shares
..................
13,265
235,500
Diluted earnings per share attributable
to Toyota
Motor Corporation
........................
2,049,405
14,230,090
144.02
For
the
year
ended
March
31,
2021
Net income attributable to Toyota
Motor
Corporation
.............................
2,245,261
Basic earnings per share attributable
to Toyota
Motor Corporation
....................
2,245,261
13,976,442
160.65
Effect of dilutive securities
Model AA Class Shares
..................
12,569
229,694
Diluted earnings per share attributable
to Toyota
Motor Corporation
........................
2,257,830
14,206,137
158.93
For
the
year
ended
March
31,
2022
Net income attributable to Toyota
Motor
Corporation
.........................
2,850,110
Basic earnings per share attributable
to Toyota
Motor Corporation
....................
2,850,110
13,887,348
205.23
Effect of dilutive securities
Model AA Class Shares
..................
2
3
3
1
1
Diluted earnings per share attributable
to Toyota
Motor Corporation
........................
2,850,132
13,887,659
205.23
In
addition
to
the
disclosure
requirements
under
IFRS,
Toyota
discloses
the
information
below
in
order
to
provide financial statements
users with valuable information.
F-83
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
The
following
table
shows
Toyota
Motor
Corporation
shareholders’
equity
per
share.
Toyota
Motor
Corporation
shareholders’
equity
per
share
amounts
are
calculated
by
dividing
Toyota
Motor
Corporation
shareholders’ equity
in the consolidated
statement of
financial position
by common shares
issued and
outstanding
at the end of the year (excluding treasury
stock).
Yen
in
millions
Thousands
of
shares
Yen
Toyota
Motor
Corporation
shareholders’
equity
Common
shares
issued
and
outstanding
at
the
end
of
the
year
(excluding
treasury
stock)
Toyota
Motor
Corporation
shareholders’
equity
per
share
As
of
March
31,
2021
.......................
23,404,547
13,979,743
1,674.18
As
of
March
31,
2022
.......................
26,245,969
13,778,302
1,904.88
On
October
1,
2021,
TMC
effected
a
five-for-one
stock
split
of
its
common
stock
to
shareholders.
“Basic
earnings
per
share
attributable
to
Toyota
Motor
Corporation”,
“Diluted
earnings
per
share
attributable
to
Toyota
Motor
Corporation”
and
“Toyota
Motor
Corporation
shareholders’
equity
per
share”
are
calculated
based
on
the
assumption that the stock split
was implemented at the beginning
of the earliest period presented
in this note.
30.
Contractual
commitments
and
contingent
liabilities
(1)
Contractual
commitments
Contractual
commitments
relating
to
purchase
of
property,
plant
and
equipment,
other
assets,
and
services
are ¥359,214 million, ¥349,143 million as
of March 31, 2021 and 2022.
(2)
Guarantees
Toyota
enters
into
contracts
with
Toyota
dealers
to
guarantee
customers’
payments
of
their
installment
payables
that
arise
from
installment
contracts
between
customers
and
Toyota
dealers,
as
and
when
requested
by
Toyota
dealers.
Guarantee
periods
are
set
to
match
maturity
of
installment
payments,
and
as
of
March
31,
2022,
range
from
1
month
to
8
years;
however,
they
are
generally
shorter
than
the
useful
lives
of
products
sold.
Toyota
is required to execute its guarantee
primarily when customers
are unable to make required
payment.
The
maximum
potential
amount
of
future
payments
are
¥3,710,352
million
and
¥3,641,978
million
as
of
March
31,
2021
and
2022.
Liabilities
for
guarantees
totaling
¥18,493
million,
and
¥21,869
million
have
been
provided
as
of
March
31,
2021
and
2022.
Under
these
guarantee
contracts,
Toyota
is
entitled
to
recover
any
amount paid by Toyota from the customers
whose original obligations Toyota has
guaranteed.
(3)
Market
treatment
such
as
recalls,
damages
and
lawsuits
Toyota
and
other
automakers
have
been
named
in
certain
class
actions
filed
in
Mexico,
Canada,
Australia,
Israel and
Brazil relating
to Takata airbag
issues. The actions
in Mexico,
Israel and Brazil
are being litigated.
The
action in Australia is in the
process of resolution.
Toyota
is
named
as
a
defendant
in
an
economic
loss
class
action
lawsuit
in
Australia
in
which
damages
are
claimed
on
the
basis
that
diesel
particulate
filters
in
certain
vehicle
models
are
defective.
On
April
7,
2022,
Toyota
received
an
unfavourable
judgment
in
the
court
of
first
instance.
The
judgment
included
a
finding
that
there
was
a
perceived
reduction
in
vehicle
value
of
certain
vehicle
models.
Toyota
disagrees
with
the
judgment
and
has
filed
an
appeal.
Other
claims
of
economic
loss
in
this
class
action
lawsuit
continue
to
be
litigated
at
the
F-84
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
court
of
first
instance.
In
estimating
the
provision
we
should
record
in
the
consolidated
financial
statements
as
a
result
of
the
aforementioned
judgment,
Toyota
has
considered
various
factors
including
the
legal
and
factual
circumstances
of
the
case,
the
contents
of
the
judgement
of
the
court
of
first
instance,
and
the
views
of
legal
counsel.
The
currently
estimated
probable
economic
outflow
related
to
the
class
action
is
immaterial
to
Toyota’s
consolidated
financial
position,
results
of
operations
and
cash
flows.
At
this
stage,
however,
the
final
outcome
and therefore ultimate financial
liability for
Toyota on account of this matter
cannot be predicted with certainty.
As
previously
disclosed,
Toyota
entered
into
a
consent
decree
on
January
14,
2021
with
the
U.S.
EPA,
the
Department
of
Justice
(“DOJ”)
and
the
Civil
Division
of
the
U.S.
Attorney’s
Office
for
the
Southern
District
of
New
York
(“SDNY”)
to
resolve
investigations
stemming
from
a
self-reported
process
gap
in
fulfilling
certain
emissions
defect
information
reporting
requirements.
Under
the
consent
decree,
Toyota
agreed
to
pay,
and
has
paid, a $180 million
civil penalty and to comply
with certain additional
periodic reporting requirements.
The U.S.
District Court for the Southern District
of New York approved the consent decree on April
2, 2021.
In
April
2020,
Toyota
reported
possible
anti-bribery
violations
related
to
a
Thai
subsidiary
to
the
SEC
and
the
DOJ,
and
is
cooperating
with
their
investigations.
Investigations
by
governmental
authorities
related
to
these
matters
could
result
in
the
imposition
of
civil
or
criminal
penalties,
fines
or
other
sanctions,
or
litigation.
Toyota
cannot predict the scope, duration or
outcome of these matters
at this time.
Toyota
also
has
various
other
pending
legal
actions
and
claims,
including
without
limitation
personal
injury
and
wrongful
death
lawsuits
and
claims
in
the
United
States,
as
well
as
intellectual
property
litigation,
and
is
subject to government investigations
from time to time.
Beyond
the
amounts
accrued
with
respect
to
all
aforementioned
matters,
Toyota
is
unable
to
estimate
a
range of
reasonably
possible
loss, if
any,
for
the pending
legal
matters
because
(i)
many of
the proceedings
are
in
evidence
gathering
stages,
(ii)
significant
factual
issues
need
to
be
resolved,
(iii)
the
legal
theory
or
nature
of
the
claims
is
unclear,
(iv)
the
outcome
of
future
motions
or
appeals
is
unknown
and/or
(v)
the
outcomes
of
other
matters of these
types vary widely and do not appear
sufficiently similar
to offer meaningful guidance.
Therefore,
for
all
of
the
aforementioned
matters,
which
Toyota
is
in
discussions
to
resolve,
any
losses
that
are
beyond
the
amounts accrued could have an adverse effect
on Toyota’s financial position,
results of operations
or cash flows.
TMC has
a
concentration
of
labor
supply
in
employees
working
under
collective
bargaining
agreements
and
a substantial portion of these
employees are working under the agreement
that will expire on December
31, 2023.
31.
Details
of
company
organization
(1)
Major
subsidiaries
Toyota’s major subsidiaries
are follows;
Toyota
primarily
conducts
business
in
the
automotive
industry.
Toyota
also
conducts
business
in
finance
and other industries.
Automobiles
are
mainly
manufactured
by
TMC,
Hino
Motors
Ltd.
and
Daihatsu
Motor
Co.,
Ltd.,
but
some
of them are outsourced in Japan. Toyota
Motor Manufacturing Kentucky, Inc. and others
manufacture overseas.
Auto parts
are manufactured
by TMC
and others.
These products
are sold
through dealers
such as
TOYOTA
Mobility Tokyo Inc. in Japan, and through dealers
such as Toyota Motor Sales, U.S.A., Inc. overseas.
F-85
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
In
the
financing
business,
Toyota
Finance
Corporation
and
others
provide
sales
finance
services
in
Japan
and Toyota Motor Credit Corporation and others
overseas.
Other business consists of information
technology business and others.
(2)
Structured
entities
(i)
Consolidated structured
entities
Toyota
periodically
securitizes
receivables
related
to
financial
services
and
vehicles
on
leases
for
liquidity
and funding purposes
and
transfers them
to special purpose
entities. Toyota
is deemed to
have the power to
direct
the
activities
of
these
entities
that
most
significantly
impact
the
entities’
economic
performances.
Therefore,
Toyota has consolidated them.
The
creditors
of
these
entities
do
not
have
recourse
to
Toyota’s
general
credit
with
the
exception
of
debts
guaranteed
by
Toyota.
Risks
to
which
Toyota
is
exposed
including
credit,
interest
rate,
and/or
prepayment
risks
are not incremental compared
with the situation before Toyota enters
into securitization
transactions.
Toyota
has
equity
in
investment
trusts
and
other
special
purpose
entities.
With
respect
to
some
of
the
investment
trusts,
Toyota
has
both
the
obligation
to
absorb
losses
of
or
the
right
to
receive
benefits
from
the
investment
trusts
that
could
potentially
be
significant
to
the
investment
trusts
and
the
power
to
direct
the
activities
of
the
investment
trusts
that
most
significantly
impact
the
investment
trusts’
economic
performance
through the asset manager. Therefore,
Toyota has consolidated them.
Related
to
securitization
transactions,
¥3,132,734
million
and
¥3,367,601
million
receivables
related
to
financial
services,
¥3,211,211
million
and
¥3,882,623
million
secured
debt
were
included
in
Toyota’s
consolidated financial statements
as of March 31, 2021 and 2022, respectively.
(ii)
Unconsolidated structured entities
Other
investment
trusts
and
other
special
purpose
entities
are
instructed
based
on
contractual
arrangements,
and are
designed
so
that
voting
or
similar
rights
are
not
the
dominant
factor
in deciding
who
controls
the entities.
The
trusts
and
the
special
purpose
entities
are
defined
as
structured
entities
but
are
determined
that
Toyota
lacks
the
power
to
direct
the
activities
of
these
investments
that
most
significantly
impact
the
trust’s
economic
performance
and,
therefore
does
not
consolidate
the
investment
trusts
and
the
special
purpose
entities.
Investments
in
the
investment
trusts
and
the
special
purpose
entities
are
held
at
fair
value
and
are
included
in
“Other
financial
assets”
in
the
consolidated
statement
of
financial
position.
The
maximum
exposure
to
loss
is
limited
to
the
carrying
value
of
its
investment.
The
carrying
value
of
the
trusts
totaled
¥37,397
million
and
¥18,829
million
as
of
March
31,
2021
and
2022,
respectively.
The
carrying
value
of
the
special
purpose
entities
totaled
¥1,240,530
million
and
¥1,073,137
million
as of
March
31,
2021
and
2022, respectively.
Toyota does
not
provide support that is not contractually
required to the investments.
F-86
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
32.
Related
party
transactions
(1)
Transactions
with
associates
and
joint
ventures
The
balances
and
turnover
of
receivables
and
payables
with
associates
and
joint
ventures
accounted
for
under the equity method are as follows:
Yen
in
millions
March
31,
2021
2022
Trade accounts and other receivables
Associates
..........................................................
265,938
302,212
Joint ventures
........................................................
44,481
64,195
Total
..........................................................
310,419
366,407
Trade accounts and other payables
Associates
..........................................................
855,997
1,086,397
Joint ventures
........................................................
6
5
6
5,112
Total
..........................................................
856,653
1,091,509
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Sales revenues
Associates
................................................
1,928,468
1,138,144
1,948,681
Joint ventures
..............................................
489,735
499,437
413,703
Total
................................................
2,418,202
1,637,582
2,362,384
Cost of products sold (purchases)
Associates
................................................
6,694,395
5,983,797
7,946,788
Joint ventures
..............................................
86,747
51,434
308
Total
................................................
6,781,142
6,035,231
7,947,095
Dividends
from
associates
and
joint
ventures
accounted
for
under
the
equity
method
are
¥205,101
million
and
¥252,557
million
for
the
years
ended
March
31,
2021
and
2022,
respectively.
In
addition,
Toyota
does
not
engage in transactions with associates
and joint ventures outside
of the normal course of business.
(2)
Compensation
of
key
management
The compensation for the directors
and audit & supervisory board members
of TMC is as follows:
Yen
in
millions
For
the
years
ended
March
31,
2020
2021
2022
Monthly compensation
..........................................
1,023
987
1,083
Bonus
........................................................
1,039
748
196
Share compensation
.............................................
4
7
7
3
6
4
7
7
2
Other
........................................................
7
4
7
Total
....................................................
2,540
2,847
2,051
F-87
TOYOTA
MOTOR
CORPORATION
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS—(Continued)
“Other”
refers
to
income
tax
compensation
that
was
granted
to
a
member
of
the
Board
of
Directors,
Mr.
Didier
Leroy,
with
respect
to
his
remuneration
during
the
period
in
which
he
served
as
a
member
of
the
Board of Directors. Mr. Leroy retired
on June 11, 2020.
33.
Supplemental
cash
flow
information
“Other,
net”
in
cash
flows
from
investing
activities
includes
a
net
increase
in
time
deposits
of
¥1,700,254
million
and
a
net
decrease
in
time
deposits
of
¥2,070,726
million
for
the
year
ended
March
31,
2021
and
2022,
respectively.
34.
Significant
subsequent
events
Not applicable.
F-88
ITEM
19.
EXHIBITS
Index
to
Exhibit
1.1
Amended and Restated Articles of Incorporation of
the Registrant (English translation)
1.2
Amended
and
Restated
Regulations
of
the
Board
of
Directors
of
the
Registrant
(English
translation)
1.3
Amended
and
Restated
Regulations
of
the
Audit
&
Supervisory
Board
of
the
Registrant
(English
translation)
(incorporated
by
reference
to
Exhibit
1.3
to
Toyota’s
Annual
Report
on
Form
20-F
for
the
fiscal
year
ended
March
31,
2016,
filed
with
the
SEC
on
June
24,
2016
(file
no.
001-14948))
2.1
Amended
and
Restated
Share
Handling
Regulations
of
the
Registrant
(English
translation)
(incorporated
by
reference
to
Exhibit
2.1
to
Toyota’s
Annual
Report
on
Form
20-F
for
the
fiscal
year ended March 31, 2021, filed with the SEC on June 24, 2021 (file
no. 001-14948))
2.2
Form
of
Amended
and
Restated
Deposit
Agreement
among
the
Registrant,
The
Bank
of
New
York
Mellon,
as
depositary,
and
all
owners
and
holders
from
time
to
time
of
American
Depositary
Shares
issued
thereunder,
including
the
form
of
American
Depositary
Receipt(incorporated
by
reference
to
Exhibit
1
to
Toyota’s
Registration
Statement
on
Form
F-6,
filed with the SEC on September 21, 2021 (file
no. 333-259683))
2.3
Form of American Depositary Receipt (included in
Exhibit 2.2)
2.4
Description
of
Toyota’s
Common
Stock
(incorporated
by
reference
to
“Item
10.B.
Memorandum
and Articles of Incorporation”
of this annual report)
2.5
Description of Toyota’s American Depositary Shares
8.1
List
of
Principal
Subsidiaries
(See
“Organizational
Structure”
in
“Item
4.
Information
on
the
Company”)
11.1
Code of
Ethics
of
the
Registrant
applicable
to
its
members
of the
board
of directors
and operating
officers,
including
its
principal
executive
officer,
principal
financial
officer,
principal
accounting
officer
or
controller,
or
persons
performing
similar
functions
(English
translation)
(incorporated
by
reference
to
Exhibit
11.1
to
Toyota’s
Annual
Report
on
Form
20-F
for
the
fiscal
year
ended
March 31, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948))
12.1
Certifications
of
the
Registrant’s
President
and
Member
of
the
Board,
as
well
as
Member
of
the
Board, pursuant to Section 302 of the Sarbanes-Oxley
Act
13.1
Certifications
of
the
Registrant’s
President
and
Member
of
the
Board,
as
well
as
Member
of
the
Board, pursuant to Section 906 of the Sarbanes-Oxley
Act
101.INS
Inline
XBRL
Instance
Document
the
instance
document
does
not
appear
in
the
Interactive
Data File because its XBRL tags are embedded within
the Inline XBRL document
101.SCH
Inline
XBRL Taxonomy Extension Schema Document
101.CAL
Inline
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition
Linkbase Document
101.LAB
Inline
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation
Linkbase Document
104
The
cover
page
for
the
registrant’s
Annual
Report
on
Form
20-F
for
the
year
ended
March
31,
2022, has been formatted in Inline
XBRL
124
SIGNATURES
The
registrant
hereby
certifies
that
it
meets
all
of
the
requirements
for
filing
on
Form
20-F
and
that
it
has
duly caused and authorized the undersigned
to sign this annual report on its
behalf.
TOYOTA
MOTOR
CORPORATION
By:
/s/ Masahiro Yamamoto
Name:
Masahiro
Yamamoto
Title:
Chief
Officer,
Accounting
Group
Date: June 23, 2022
Exhibit
1.1
ARTICLES OF INCORPORATION
OF TOYOTA MOTOR CORPORATION
(As amended on June 15, 2022)
CHAPTER I. GENERAL PROVISIONS
Article 1. (Trade Name)
The
name
of
the
Corporation
shall
be
“Toyota
Jidosha
Kabushiki
Kaisha”
to
be
expressed
in
English
as
“TOYOTA MOTOR CORPORATION”.
Article 2. (Purpose)
The purpose of the Corporation shall be to
engage in the following businesses:
(1)
the
manufacture,
sale,
leasing
and
repair
of
motor
vehicles,
industrial
vehicles,
ships,
aircraft,
other
transportation
machinery
and
apparatus,
spacecraft
and
space
machinery
and
apparatus,
and
parts
thereof;
(2)
the
manufacture,
sale,
leasing
and
repair
of
industrial
machinery
and
apparatus
and
other
general
machinery and apparatus, and parts
thereof;
(3)
the manufacture,
sale, leasing and repair
of electrical machinery
and apparatus, and parts thereof;
(4)
the
manufacture,
sale,
leasing
and
repair
of
measuring
machinery
and
apparatus,
and
medical
machinery and apparatus, and parts
thereof;
(5)
the manufacture
and sale of ceramics and
products of synthetic resins, and materials
thereof;
(6)
the
manufacture,
sale
and
repair
of
construction
materials
and
equipment,
furnishings
and
fixtures
for
residential buildings;
(7)
the
planning,
designing,
supervision,
execution
and
undertaking
of
construction
works,
civil
engineering works, land development, urban
development and regional development;
(8)
the sale, purchase,
leasing, brokerage and management
of real estate;
(9)
the
service
of
information
processing,
information
communications
and
information
supply,
and
the
development, sale and leasing of software;
(10)
the
design
and
development
of
product
sales
systems
that
utilize
networks
such
as
the
Internet;
sale,
leasing,
maintenance
of
computers
included
within
such
systems,
and
sales
of
products
by
utilizing
such systems;
(11)
the
inland
transportation,
marine
transportation,
air
transportation,
stevedoring,
warehousing
and
tourism businesses;
(12)
the
printing,
publishing,
advertising
and
publicity,
general
leasing,
security
and
workers
dispatch
businesses;
(13)
the
credit
card
operations,
purchase
and
sale
of
securities,
investment
consulting,
investment
trust
operation, and other financial
services;
(14)
the
operation
and
management
of
such
facilities
as
parking
lots,
showrooms,
educational
facilities,
medical
care
facilities,
sports
facilities,
marinas,
airfields,
food
and
drink
stands
and
restaurants,
lodging facilities, retail
stores and others;
(15)
the non-life insurance agency business and life insurance
agency business;
(16)
the
production
and
processing
by
using
biotechnology
of
agricultural
products
including
trees,
and
the
sale of such products;
(17)
power generation and the supply and sale of electric power
(18)
the sale of goods related to each of the preceding items
and mineral oil;
(19)
the
conducting
of
engineering,
consulting,
invention
and
research
relating
to
each
of
the
preceding
items and the utilization
of such invention and research; and
(20)
any businesses incidental to or related to any of the preceding
items.
Article 3. (Location of Principal
Office)
The principal office of the Corporation
shall be located in Toyota City, Aichi
Prefecture, Japan.
Article 4. (Public Notices)
Public
notices
of
the
Corporation
shall
be
given
electronically;
provided,
however,
that
in
the
case
that
an
electronic
public
notice
is
impracticable
due
to
an
accident
or any
other
unavoidable
reason, public
notices
of
the
Corporation shall be given in the newspaper
“The Nihon Keizai Shimbun”.
CHAPTER II. SHARES
Article 5. (Total Number of Authorized
Shares)
The
total
number
of
shares
which
the
Corporation
is
authorized
to
issue
shall
be
fifty
billion
(50,000,000,000).
Article
6.
(Number
of
Shares
Constituting
One
Unit
(tangen)
and
Rights
to
Shares
Constituting
Less
than
One
Unit (tangen))
1.
The
number
of
shares
constituting
one
unit
(tangen)
of
shares
of
the
Corporation
shall
be
one
hundred
(100).
2.
The
shareholders
of
the
Corporation
are
not
entitled
to
exercise
any
rights
to
shares
constituting
less
than
one
unit
(tangen)
of
shares
held
by
the
shareholders,
other
than
the
rights
provided
for
in
each
Item
of
Article 189, Paragraph 2 of the Companies Act
(Kaisha-hou).
Article 7. (Acquisition of Own Shares)
The Corporation may
acquire its own shares
by a resolution
of the Board of Directors in accordance
with the
provisions of Article 165, Paragraph 2 of
the Companies Act.
Article 8. (Transfer Agent)
1.
The Corporation
shall have a transfer
agent (
Kabunushimeibo-Kanrinin
).
2.
The
transfer
agent
and
the
location
of
its
office
shall
be
designated
by
a
resolution
of
the
Board
of
Directors,
and
public
notice
thereof
shall
be
given.
The
register
of
shareholders
and
the
register
of
stock
acquisition
rights
shall
be
kept
at
the
office
of
the
transfer
agent.
The
entry
or
recording
into
the
register
of
shareholders
and
the
register
of
stock
acquisition
rights,
the
purchase
of
shares
constituting
less
than
one
unit
(tangen)
and
any
other
matters
related
to
the
shares
and
stock
acquisition
rights
shall
be
handled
by
the
transfer
agent and not by the Corporation.
Article 9. (Share Handling Regulations)
The
procedures
for
and
fees
for
the
entry
or
recording
into
the
register
of
shareholders
and
the
register
of
stock
acquisition
rights,
purchasing
shares
constituting
less
than
one
unit
(tangen)
and
any
other
matters
relating
to
the
handling
of
shares
and
stock
acquisition
rights
shall
be
subject
to
the
Share
Handling
Regulations
established by the Board of Directors.
Article 10. (Record Date)
1.
The
Corporation
shall
deem
any
shareholder
entered
or
recorded
in
the
final
register
of
shareholders
as
of
March
31
in
such
year
to
be
a
shareholder
entitled
to
exercise
its
rights
at
the
ordinary
general
meeting
of
shareholders for that business
year.
2.
In
addition
to
the
case
provided
for
in
the
preceding
paragraph,
the
Corporation
may,
after
giving
prior
public notice, fix a date as the
record date, where it deems it necessary
to do so.
CHAPTER III. GENERAL MEETINGS OF SHAREHOLDERS
Article 11. (Ordinary General Meetings
and Extraordinary General Meetings
of Shareholders)
1.
The
ordinary
general
meeting
of
shareholders
of
the
Corporation
shall
be
convened
in
June
of
each
year.
Extraordinary general meetings
of shareholders may be called
whenever necessary.
2.
Each
general
meeting
of
shareholders
may
be
convened
at
the
place
where
the
principal
office
of
the
Corporation is located, or at a place
adjacent thereto, or in Nagoya City.
Article 12. (Resolutions)
1.
All
resolutions
of
a
general
meeting
of
shareholders
shall
be
adopted
by
a
majority
of
the
votes
of
the
shareholders
present
at
the
meeting
who
are
entitled
to
vote,
unless
otherwise
provided
by
laws
and
regulations
or these Articles of Incorporation
of the Corporation.
2.
Special
resolutions
as
specified
by
Article
309,
Paragraph
2
of
the
Companies
Act
shall
be
adopted
by
not less
than two-thirds
(2/3)
of the
votes of
the shareholders
present
at the
meeting who
hold shares
representing
in aggregate not less than one-third
(1/3) of the voting rights
of all shareholders who are entitled
to vote.
Article 13. (Chairman of General Meeting)
1.
The
Chairman
of
the
Board
or
the
President
of
the
Corporation
shall
preside
as
chairman
at
a
general
meeting of shareholders.
2.
In
the
event
that
the
positions
of
both
the
Chairman
of
the
Board
and
the
President
are
vacant
or
that
both
of
them
are
prevented
from
so
presiding
as
chairman,
another
Director
of
the
Corporation
shall
preside
in
their place according to the order
of precedence previously established
by the Board of Directors.
Article 14. (Exercise of Voting Rights by Proxy)
1.
A
shareholder
may
exercise
its
voting
rights
by
proxy,
provided,
however,
that
the
proxy
shall
be
a
shareholder of the Corporation who is entitled
to exercise its own voting
rights.
2.
In
cases
where
the
preceding
paragraph
applies,
the
shareholder
or
its
proxy
shall
file
with
the
Corporation
a
document
establishing
the
proxy’s
power
of
representation
for
each
general
meeting
of
shareholders.
3.
The
Corporation
may
refuse
a
shareholder
having
two
(2)
or
more
proxies
attend
a
general
meeting
of
shareholders.
Article 15. (Measures for Electronic
Provision of Information,
etc.)
1.
Upon
convening a general
meeting of shareholders,
the Corporation shall
provide information contained
in
reference
documents
for
the
general
meeting
of
shareholders,
business
reports,
financial
statements
and
consolidated
financial
statements
and
other
documents
to
shareholders
electronically
pursuant
to
laws
and
regulations.
2.
Among
the
matters
to
be
provided
electronically,
the
Corporation
may
choose
not
to
include
all
or
part
of
the
matters
stipulated
in
the
Ordinance
of
the
Ministry
of
Justice
in
the
paper
copy
to
be
sent
to
shareholders
who have requested it by the record date
for vesting voting rights.
CHAPTER IV. MEMBERS OF THE BOARD
OF DIRECTORS AND BOARD OF DIRECTORS
Article 16. (Number of Directors)
The Corporation shall have no more than twenty
(20) Directors.
Article 17. (Election of Directors)
1.
Directors
shall be elected by a resolution
of a general meeting
of shareholders.
2.
A
resolution
for the
election of
Directors
shall be
adopted by a
majority vote
of the shareholders
present
at
the
meeting
who
hold
shares
representing
in
aggregate
not
less
than
one-third
(1/3)
of
the
voting
rights
of
all
the shareholders who are entitled
to vote.
3.
The election
of Directors shall not
be made by cumulative voting.
Article 18. (Term of Office of Directors)
1.
The
term
of
office
of
Directors
shall
expire
at
the
closing
of
the
ordinary
general
meeting
of
shareholders
to
be
held
for
the
last
business
year
of
the
Corporation
ending
within
one
(1)
year
after
their
election.
2.
The
term
of
office
of
any
Director
elected
in
order
to
increase
the
number
of
Directors
or
to
fill
a
vacancy
shall
be
the
balance
of
the
term
of
office
of
the
other
Directors
who
hold
office
at
the
time
of
his/
her
election.
Article 19. (Board of Directors)
1.
The Corporation
shall have a Board of Directors.
2.
Notice
of
a
meeting
of
the
Board
of
Directors
shall
be
dispatched
to
each
Director
and
each
Audit
&
Supervisory
Board
Member
at
least
three
(3)
days
before
the
date
of
the
meeting.
In
case
of
urgency,
however,
such period may be shortened.
3.
With
respect
to
matters
to
be
resolved
by
the
Board
of
Directors,
the
Corporation
shall
deem
that
such
matters were approved
by a resolution
of the Board of Directors when all the
Directors express their agreement
in
writing
or
by
electronic
records.
Provided,
however,
that
this
provision
shall
not
apply
when
any
Audit
&
Supervisory Board Member expresses his/her
objection to such matters.
4.
In
addition
to
the
preceding
two
(2)
paragraphs,
the
management
of
the
Board
of
Directors
shall
be
subject to the Regulations of the Board
of Directors established by the Board
of Directors.
Article 20. (Representative Directors
and Executive Directors)
1.
The Board of
Directors shall designate one
or more Representative Directors
by its resolution.
2.
The
Board
of
Directors
may
appoint
one
Chairman
of
the
Board,
one
President
and
one
or
more
Vice
Chairmen of the Board and Executive Vice Presidents
by its resolution.
Article 21. (Honorary Chairmen and Senior Advisors)
The Board of Directors may appoint Honorary Chairmen
and Senior Advisors by its resolution.
Article 22. (Exemption from Liability
of Directors)
In
accordance
with
the
provisions
of
Article
426,
Paragraph
1
of
the
Companies
Act,
the
Corporation
may,
by a
resolution
of
the Board
of
Directors,
exempt Directors
(including
former
Directors)
from
liabilities
provided
for in Article 423, Paragraph 1 of the
Companies Act within the limits stipulated
by laws and regulations.
Article 23. (Limited Liability
Agreement with members of the
Board of Directors)
In
accordance
with
the
provisions
of
Article
427,
Paragraph
1
of
the
Companies
Act,
the
Corporation
may
enter
into
an
agreement
with
Members
of
the
Board
of
Directors
(excluding
Executive
Members
of
the
Board
of
Directors,
etc.)
limiting
liabilities
provided
for
in
Article
423,
Paragraph
1
of
the
Companies
Act;
provided,
however, that the
limit of the
liability under
the agreement
shall be the
minimum amount
of liability stipulated
by
laws and regulations.
CHAPTER V. AUDIT & SUPERVISORY
BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD
Article
24.
(Establishment
of
Audit
&
Supervisory
Board
Members
and
Number
of
Audit
&
Supervisory
Board
Members)
The Corporation shall have no more than seven
(7) Audit & Supervisory Board Members.
Article 25. (Election of Audit & Supervisory
Board Members)
1.
Audit
&
Supervisory
Board
Members
shall
be
elected
by
a
resolution
of
a
general
meeting
of
shareholders.
2.
A
resolution
for
the
election
of
Audit
&
Supervisory
Board
Members
shall
be
adopted
by
a
majority
vote
of
the
shareholders
present
at
the
meeting
who
hold
shares
representing
in
aggregate
not
less
than
one-third
(1/3) of the voting rights of all
the shareholders who are entitled
to vote.
Article 26. (Term of Office of Audit
& Supervisory Board Members)
1.
The
term
of
office
of
Audit
&
Supervisory
Board
Members
shall
expire
at
the
closing
of
the
ordinary
general
meeting
of
shareholders
to
be
held
for
the
last
business
year
of
the
Corporation
ending
within
four
(4) years after their election.
2.
The
term
of
office
of
any
Audit
&
Supervisory
Board
Member
elected
to
fill
a
vacancy
shall
be
the
balance of the term of office
of the Audit & Supervisory Board Member
whom he/she succeeds.
Article 27. (Audit & Supervisory Board)
1.
The Corporation
shall have an Audit & Supervisory
Board.
2.
Notice
of
a
meeting
of
the
Audit
&
Supervisory
Board
shall
be
dispatched
to
each
Audit &
Supervisory
Board
Members
at
least
three
(3)
days
before
the
date
of
the
meeting.
In
case
of
urgency,
however,
such
period
may be shortened.
3.
In
addition
to
the
provisions
of
the
preceding
paragraph,
the
management
of
the
Audit
&
Supervisory
Board
shall
be
subject
to
the
Regulations
of
the
Audit
&
Supervisory
Board
established
by
the
Audit
&
Supervisory Board.
Article 28. (Full-time Audit &
Supervisory Board Member)
The
Audit
&
Supervisory
Board
shall,
by
its
resolution,
select
one
or
more
full-time
Audit
&
Supervisory
Board Members.
Article 29. (Exemption from Liability
of Audit & Supervisory Board Members)
In
accordance
with
the
provisions
of
Article
426,
Paragraph
1
of
the
Companies
Act,
the
Corporation
may,
by
a
resolution
of
the
Board
of
Directors,
exempt
Audit
&
Supervisory
Board
Members
(including
former
Audit &
Supervisory
Board
Members)
from
liabilities
provided for
in
Article
423, Paragraph
1
of
the Companies
Act within the limits stipulated
by laws and regulations.
Article 30. (Limited Liability
Agreement with Audit & Supervisory Board Members)
In
accordance
with
the
provisions
of
Article
427,
Paragraph
1
of
the
Companies
Act,
the
Corporation
may
enter into an
agreement with Audit
& Supervisory Board Members
limiting liabilities
provided for in Article
423,
Paragraph
1
of
the
Companies
Act;
provided,
however,
that
the
limit
of
the
liability
under
the
agreement
shall
be
the minimum amount of liability
stipulated by laws and regulations.
CHAPTER VI. ACCOUNTING
AUDITOR
Article 31. (Accounting Auditor)
The Corporation shall have an Accounting Auditor (
kaikeikansa-nin
).
CHAPTER VII. ACCOUNTS
Article 32. (Business Year)
The
business
year
of
the
Corporation
shall
be
one
(1)
year
from
April
1
of
each
year
until
March
31
of
the
following year.
Article 33. (Dividends from Surplus, etc.)
1.
Dividends
from Surplus
of the Corporation
shall be paid to the shareholders
or registered share pledgees
entered or recorded in the final
register of shareholders
as of March 31 of each year.
2.
The
Corporation
may,
by
a
resolution
of
the
Board
of
Directors,
distribute
dividends
from
surplus
as
provided
for
in
Article
454,
Paragraph
5
of
the
Companies
Act
to
the
shareholders
or
registered
share
pledgees
entered or recorded in the final
register of shareholders
as of September 30 of each year.
3.
In
addition
to
the
preceding
two
(2)
paragraphs,
the
Corporation
may,
by
a
resolution
of
the
Board
of
Directors, decide on matters
provided for in each Item of Article
459, Paragraph 1 of the Companies Act.
4.
No interest
shall be paid on unpaid dividends
from surplus.
Article 34. (Dispensation from Payment
of Dividends from Surplus, etc.)
In
the
case
where
the
dividends
from
surplus
are
paid
by
cash,
the
Corporation
shall
not
be
obliged
to
pay
any dividends from surplus after
three (3) years have expired from
the date of tender thereof.
(Supplementary Provisions)
Article
1.
The
deletion
of
the
Article
15.
(Deemed
Delivery
of
Reference
Documents,
etc.
for
General
Meeting
of
Shareholders)
of
the
current
Articles
of
Incorporation
and
the
establishment
of
the
proposed
Article
15.
(Measures
for
Electronic
Provision
of
Information,
etc.)
shall
come
into
effect
as
of
September
1,
2022,
the
date
of
enforcement
of
the
amended
provisions
stipulated
in
the
proviso
to
Article
1
of
the
supplementary provisions
of
the Act
Partially Amending
the Companies
Act (Act No. 70
of 2019) (the
“Effective
Date”).
Article
2.
Notwithstanding
the
provisions
of
the
preceding
paragraph,
Article
15.
of
the
Articles
of
Incorporation
before
the
amendment shall
remain
in
force
with respect
to
a
general meeting
of
shareholders
to
be
held on a date within six months from
the Effective Date.
Article
3.
These
supplementary
provisions
shall
be
deleted
after
the
lapse
of
six
months
from
the
Effective
Date
or
three
months
after
the
General
Meeting
of
Shareholders
mentioned
in
the
preceding
paragraph,
whichever is later.
Exhibit
1.2
For reference purpose only
(TRANSLATION)
REGULATIONS
OF
THE
BOARD
OF
DIRECTORS
OF
TOYOTA
MOTOR
CORPORATION
Established: February 27, 1952
As last amended on June 1, 2022
(Aa004-28)
Article
1.
(Regulations
of
the
Board
of
Directors)
Except
as
provided
for
in
laws,
ordinances
or
the
Articles
of
Incorporation,
matters
relating
to
the
Board
of
Directors
of
Toyota
Motor
Corporation
(the
“Company”)
shall
be
governed
by
the
provisions
of
these
Regulations.
Article
2.
(Purpose
and
Composition)
1.
The
Board
of
Directors
shall
be
composed
of
all
the
Members
of
the
Board
of
Directors
and
shall
make
decisions
on
the
execution
of
business,
supervise
the
execution
of
the
duties
of
Members
of
the
Board
of
Directors, and designate and dismiss
the Representative Directors.
2.
Audit
&
Supervisory
Board
Members
shall
be
present
and,
whenever
necessary,
give
their
opinions
at
a
meeting of the Board of Directors.
3.
The
Board
of
Directors
is
able
to
request
Operating
Officers
and
other
members
admitted
by
the
Chairman
to
be
present
and
give
explanation
or
comment.
However,
Operating
Officers
and
other
members
admitted
by the Chairman are not able to participate
in resolutions.
Article
3.
(Person
to
Convene
Meeting
and
Notice
of
Meeting)
1.
A
meeting
of
the
Board
of
Directors
shall
be
convened
by
the
Chairman
of
the
Board
of
Directors
or
the
President,
Member
of
the
Board
of
Directors.
In
the
event
that
the
positions
of
both
the
Chairman
of
the
Board
of
Directors
and
the
President,
Member
of
the
Board
of
Directors
are
vacant
or
that
both
of
them
are
prevented from
convening, such
meeting
shall be
convened by
the Vice
Chairman of
the Board
of Directors,
or
other
Members
of
the
Board
of
Directors
in
that
order
and
according
to
their
rank,
if
there
are
multiple
persons holding the same position.
2.
Notice
of
convening
a
meeting
of
the
Board
of
Directors
shall
be
dispatched
to
each
Member
of
the
Board
of
Directors
and
each
Audit
&
Supervisory
Board
Member
at
least
three
(3)
days
before
the
date
of
the
meeting. In the case of urgency, however,
such period may be shortened.
3.
A
meeting
of
the
Board
of
Directors
may
be
held
without
following
the
convening
procedure,
if
consented
to by all the Members of the Board of
Directors and the Audit & Supervisory Board
Members.
Article
4.
(Chairmanship
and
Method
of
Adopting
Resolutions)
1.
The
Chairman
of the
Board of
Directors
or
the President,
Member
of the
Board
of
Directors
shall
preside
as
chairman
at
a
meeting
of
the
Board
of
Directors.
In
the
event
that
the
positions
of
both
the
Chairman
of
the
Board
of
Directors
and
the
President,
Member
of
the
Board
of
Directors
are
vacant
or
that
both
of
them
are
prevented from
so presiding
as chairman,
the
Vice Chairman of
the Board of Directors,
or other
Members of
the
Board
of
Directors,
shall
preside
as
chairman
in
that
order
and
according
to
their
rank
in
the
case
that
there are multiple persons
holding the same position.
2.
Resolutions
of
the
Board
of
Directors
shall
be
adopted
at
meetings
at
which
a
majority
of
the
Members
of
the
Board
of
Directors
who
are
entitled
to
vote
shall
be
present,
by
a
majority
of
the
Members
of
the
Board
of Directors so present.
3.
With
respect
to
matters
to
be
resolved
by the
Board
of
Directors,
the
Company
shall
deem
that
such
matters
were
approved
by
a
resolution
of
the
Board
of
Directors
when
all
the
Members
of
the
Board
of
Directors
express
their
agreement
in
writing
or
by
electronic
records.
Provided,
however,
that
this
provision
shall
not
apply when any Audit & Supervisory Board Member expresses
his/her objection to such
matters.
4.
With
respect
to
matters
to
be
reported
to
the
Board
of
Directors,
Members
of
the
Board
of
Directors,
Audit &
Supervisory
Board
Members
or
Accounting Auditors
shall
not
be required
to
report
such matters
to
the
Board
of
Directors
when
such
matters
are
notified
to
all
the
Members
of
the
Board
of
Directors
and
Audit & Supervisory Board Members.
Article
5.
(Matters
to
be
Resolved)
The following matters shall be subject
to the resolution of the
Board of Directors:
(1)
Matters
provided for in the Corporation Act or other
laws or ordinances;
(2)
Matters
provided for in the Articles of Incorporation;
(3)
Matters
delegated to the Board of Directors
by resolution of a general meeting
of shareholders; and
(4)
Other important
managerial matters.
Article
6.
(Matters
to
Be
Reported)
Members of the Board of Directors
shall report to the Board of Directors
on the following matters:
(1)
State
of
execution
of
business
and
such
other
matters
as
are
provided
for
in
the
Corporation
Act
or
other laws or ordinances; and
(2)
Such other matters
as the Board of Directors may
deem necessary.
Article
7.
(Meetings
and
Minutes)
1.
A
meeting
of
the
Board
of
Directors
shall
be
held
in
Japanese,
minutes
shall
be
prepared
each
time
a
meeting
of
the
Board
of
Directors
is
held
and
such
minutes
shall
be
kept
on
file
at
the
head
office
for
ten
years.
2.
Minutes
shall
set
forth
matters
provided
for
in
the
laws
or
ordinances
and
the
Members
of
the
Board
of
Directors and Audit & Supervisory Board Members
present shall sign or affix
their names and seals thereto.
3.
Minutes
shall be prepared in Japanese.
Supplementary
Provisions
Article
1.
(Effective
Date)
These Regulations shall become effective
as of June 1, 2022.
Article
2.
(Amendment
to
Regulations)
Any amendment to these Regulations shall
be made by a resolution of the Board of
Directors.
MATTERS
TO
BE
SUBMITTED
TO
THE
BOARD
OF
DIRECTORS
General
Rules
of
the
“Matters
To
Be
Submitted
To
The
Board
of
Directors”
(this
“List”)
1.
Pursuant
to
Article
5(1),
(2)
and
(3)
of
the
Regulations
of
the
Board
of
Directors,
matters
and
items
defined
in I-1, 2 and 3 of this List shall, without
fail, be submitted to the
Board of Directors.
2.
In
addition,
pursuant
to
Article
5(4)
of
the
Regulations
of
the
Board
of
Directors,
for
matters
and
items
defined
in
I-4
of
this
List,
materiality
must
be
appropriately
judged
and
matters
must
be
submitted
accordingly to the Board of Directors.
3.
Materiality
shall
be
determined
by
the
Executive(s)
and
Executive
General
Manager(s)
responsible
for
their
divisions*
taking
into
consideration
“submission
standards,”
“special
rules,”
“definitions”
and
“explanations”
in
this
List.
If
the
amount
of
transaction
does
not
meet
the
submission
standards
at
first,
but
there
occurs
a
possibility
that
it
may
exceed
such
standards
later
on,
such
transaction
shall
be
submitted
to
the Board of Directors at the time
such possibility arises.
Even
if
a
proposal
does
not
meet
the
monetary
standards,
for
matters
with
high
uncertainty
in
investment
recovery,
potential
significant
losses,
high
geopolitical
risks,
or
high
reputation
risks,
etc.,
materiality
shall
be appropriately judged based on such risks.
4.
Pursuant
to
Article
6
of
the
Regulations
of
the
Board
of
Directors,
matters
and
items
defined
in
II
of
this
List shall be reported to the Board
of Directors without delay.
*
Business
Unit/Company
President
or
Executive
Vice
President,
or
Chief
Officer
/
Chief
Executive
Officer
or
Deputy
Chief
Officer
(TMC
Executives’
meeting:
Chairman
of
applicable
meetings/
Divisions
not
belonging to a group: Operating Officer
or KANBUSHOKU responsible for an applicable division)
Standard
for
re-submission
If
material
changes
are
made
to
a
matter
previously
submitted
to
the
Board
of
Directors
(such
as
20%
or
more
of
increase
in
the
amount
approved
by
the
Board
of
Directors),
such
matter
shall
be
re-submitted
to
the
Board of Directors.
I.
Matters
to
be
Resolved:
1.
Matters
provided for in the Companies Act or
other laws or ordinances:
Classifications
Items
Relevant
Articles
of
Applicable
Law
Shares; stock
acquisition rights:
Fixing the record date
Article 124
Acquisition of the Company’s own shares held
by its subsidiaries
Article 163
Cancellation of the Company’s own shares
Article 178
Share-splits
Article 183
Free Allotment of shares
Article 186
Reduction of the number of shares constituting
one unit (
tangen
) of shares or abolition
of the
provisions which define such number
Article 195
Auction of shares held by shareholders
whose
whereabouts are unknown
Article 197
Classifications
Items
Relevant
Articles
of
Applicable
Law
Issuance of new shares
Article 201
Disposition of the Company’s own shares
Article
201
Approval of undertaking a contract for
the total
number of shares of subscription
or similar ones
with transfer restrictions
Articles 205 and 244
Issuance of stock acquisition rights
Article 240
Approval of transferring stock acquisition
rights
with transfer restrictions
Article 265
Acquisition of stock acquisition
rights with
acquisition clause
Articles 273 and 274
Cancellation of stock acquisition
rights
Article 276
General meetings of
shareholders:
Free Allotment
of stock acquisition rights
Article 278
Convening of a general meeting of shareholders
Article 298
Board of Directors,
Members of the
Board of Directors:
Designation and dismissal of Representative
Directors
Article 362
Approval of Members of the Board of Directors’
competing transactions
Article 365
Approval of Members of the Board of Directors’
transactions for their own account
Article 365
Approval of Members of the Board of Directors’
transactions involving conflict
of interests
Article 365
Accounts:
Approval of financial statements,
business
reports and the accompanying detailed
statements
Article 436
Approval of extraordinary financial
statements
Article 441
Approval of consolidated financial
statements
Article 444
Reduction in the amount of capital
(with
conditions)
Article 447
Reduction in the amount of reserves
(with
conditions)
Article 448
Bonds:
Offering
of bonds
Article 362
Issuance of bonds with stock acquisition
rights
Article 240
Others:
Disposition
and
acquisition
of
important
property
*1
Article 362
Borrowing of a large amount of money
Article 362
Appointment
and
removal
of
managers
and
other important employees
Article 362
Classifications
Items
Relevant
Articles
of
Applicable
Law
Establishment,
alteration
and abolition
of branch
offices and other important
organizations
Article 362
Development
of
a
system
to
ensure
the
appropriateness
of
business
operations
of
the
Company
and
business
group
consisting
of
the
parent company and subsidiaries
Article 362
Other important business execution
Article 362
2.
Matters
provided for in the Articles
of Incorporation:
Classifications
Items
Relevant
Articles
of
the
Articles
of
Incorporation
Shares:
Acquisition
of Company’s own shares
Articles 7
Selection of
registration
agent
and its
location
of
business
Article 9
Amendment to the Share Handling Regulations
Article 10
General meeting of
shareholders:
The
order
in
which
to
assume
chairmanship
of
a
general meeting of shareholders
Article 13
Board of Directors;
Members of the
Board of Directors:
Designation
and
dismissal
of
Members
of
the
Board of Directors with specific titles
Article 20
Amendment
to
the
Regulations
of
the
Board
of
Directors
Article 19
Exemption
of
Members
of
the
Board
of
Directors from their liabilities
Article 22
Audit & Supervisory
Board Members:
Exemption
of
Audit
&
Supervisory
Board
Members from their liabilities
Article 29
Accounts:
Distribution of interim
dividends from surplus
Article 33
Reduction in the amount of reserves
Article 33
Other disposition of surplus
Article 33
Distribution of dividends from
surplus
Article 33
Others:
Appointment
of
Honorary
Chairman
and
Senior
Advisor
Article 21
3.
Matters
delegated to the Board of Directors
by resolution of a general meeting
of shareholders:
Classifications
Items
Shares:
Acquisition
of Company’s own shares
Issuance of new shares or stock acquisition
rights on favorable conditions
Others:
Other matters
delegated to the Board of Directors
4.
Other important
managerial matters:
Classifications
Items
Management:
Business Plan (profit
planning, Hoshin Guideline, etc.)
Important business alliances
and important joint ventures
Launching of new projects
Short-form and simplified
corporate splits
Short-form and simplified
share exchanges
Simplified acquisition of
an entire business of another company
Approval of interim and quarterly
accounts
Approval of consolidated accounts (including
interim and quarterly
accounts)
Decision on filing a lawsuit or an appeal,
or closing an important dispute
Other important matters
Personnel affairs;
organization:
Assumption of office of executives
in other companies (excluding the
company’s
subsidiaries, in the case of new offices
in listed companies only)
by Members of the
Board of Directors (excluding Outside Members
of the Board of Directors),
Operating Officers, and the head of group,
in-house company and any other
organization similar thereto
Assumption of office of executives
in important associations
(in the case of new
offices only) by Members of the
Board of Directors (excluding Outside Members
of
the Board of Directors), Operating Officers,
and the head of group, in-house company
and any other organization similar
thereto
Appointment and removal of assignment
of Members of the Board of Directors
and
Operating Officers to take charge
of the head of group, in-house company and any
other organization similar
thereto
Treatment and discipline relating
to Members of the Board of Directors
and
Operating Officers
Appointment and removal of Operating Officers
Appointment and removal of Senior Technical
Executive (
gikan
) and Advisor
(
komon
)
Approval of Operating Officers’ competing
transactions
Approval of Operating Officers’ transactions
for their own account
Approval of Operating Officers’ transactions
involving conflict
of interests
Changes in important working conditions
Other important matters
Production;
Sales;
Technology
development:
Long-term or annual production, shipment
or sales plans
Long-term or annual equipment plans
Licensing, acquisition or transfer
of important intellectual
property rights
Other important matters
Classifications
Items
Group management:
Incorporation, dissolution, acquisition and transfer
of subsidiaries
Important group managerial
matters
Other important matters
Others:
Other important
managerial matters
(For matters with high uncertainty
in investment recovery, potential
significant losses,
high geopolitical risks, or high
reputation risks, etc., materiality
shall be appropriately
judged based on such risks)
II.
Matters
to
be
reported:
Items
Relevant
Articles
of
Applicable
Law
State of execution of business
Article 363
Important facts about a competing
transaction
Article 365
Important
facts
about
any
Member
of
the
Board
of
Director’s transactions for
his/her own accounts
Article 365
Important
facts
about
any
transactions
involving
conflict
of interests
Article 365
Monthly production/shipment/sales
results
Important matters,
such
as incorporation
of subsidiaries
by
a joint venture company
Management
status
of
a
system
to
ensure
the
appropriateness
of
business
operations
of
the
Company
and
business
group
consisting of the parent company and subsidiaries
Article 362
Other important matters
Appendix
1
Items
Standard
(1)
Disposition and acquisition
of important property:
1
Acquisition
and
disposition
of
land
and
leaseholds
50,000,000,000 Yen or more per transaction
2
Investments
(excluding
fund
management
investments)
50,000,000,000 Yen or more per transaction
3
Capital
expenditure
(excluding
model
change
and renewal of aging assets)
50,000,000,000 Yen or more per transaction
4
Loans
(excluding
renewal
of
bills
and
notes,
and loans as part of financial
business)
50,000,000,000 Yen or more per transaction, or loans
outstanding of 50,000,000,000 Yen or more per
company
5
Discharge of debts
200,000,000 Yen or more per transaction
Items
Standard
6
Donations
(excluding
those
via
Japan
Automobile Manufacturers Association,
Inc.)
2,000,000,000 Yen or more per transaction
However, important matters will
be submitted, even
if the amount for a new case or single
case is less
than 2,000,000,000 Yen
(2)
Disposition and acquisition
of important property:
Important
matters will be submitted
at the initial
phase (overview, the maximum amount
of money,
etc.).
Deliberate a project as a whole. Multiple
year
appropriation is allowed if necessary
(Report is required)
(3)
Borrowings of large
amounts of money:
1
Borrowing
50,000,000,000 Yen or more per transaction
2
Guarantee of obligations
All transactions
(4)
Appointment
and
removal
of
managers
and
other
important employees:
Promotion to Senior General Manager and
above, as
well as appointment or removal
of the head of group,
in-house company, and any other organizations
similar thereto
Appointment of operating officers
at membership
companies (limited liability
company, etc.) and
limited liability partnerships,
and removal of
operating officers at such companies
(5)
Establishment,
alteration
and
abolition
of
branch
offices and other important
organizations:
Establishment, alteration
and abolition of group,
in-house company, plant and any other organizations
similar thereto
(*1)
Acquisition and disposition of land and leaseholds
In
the
case
where
any
of
the
acquisition
price,
book
value,
or
transaction
price
is
50,000,000,000
Yen
or
more per transaction, a submission
shall be required.
However,
in
the
case
that
the
acquisition
occurs
for
the
purpose
other
than
business,
a
submission
shall
be
required, even if the amount is
less than 50,000,000,000 Yen.
(*2)
Definition of “leaseholds”
“Leasehold”
is
a
right
which
is
obtained
by
a
temporary
payment
of
concession
money
as
a
setup
fee
for
leasehold, when leasing land for the purpose
of owning buildings (excluding parking
space, etc.).
(*3)
Special
rules
regarding
“membership
companies
(limited
liability
company,
etc.)
and
limited
liability
partnerships”
(I)
An
overall
business
plan
must
be
submitted
when
a
membership
company
(LLC,
etc.)
and
LLP
is
established or investment is
newly made.
(II)
If
material
changes
are
made
to
a
business
plan
previously
submitted
to
a
Board
of
Directors
meeting,
such matters shall be re-submitted
to a Board of Directors meeting.
Appendix
2
Items
Standard
(1)
Business
Plan
(profit
planning,
Hoshin
Guideline,
etc.):
1
Definition of “Business Plan”
(1)
“Business Plan”
Short-term
profit
planning
(revenue,
capital
expenditure,
R&D
cost,
etc.),
Sales
and
Production
Plan,
(initial
annual
plan,
etc.),
Mid-tem
profit
planning, Vision, etc.
(2)
“Hoshin Guideline”
Hoshin Guideline (if revised)
(2)
Important
business
alliances
and
important
joint
ventures:
1
Definition
of
“business
alliance”
and
“joint
venture”
(1)
“usiness alliance”
“Business
alliance”
shall
be
used
when
businesses
such
as
sales
tie-up,
continuous
provision
of
products,
acceptance/entrustment
of
production,
joint
production,
joint
development,
or
technology
licensing,
etc.,
are
commenced
or
terminated,
or
material
changes
with
respect
to
these
businesses
are
made
(2)
“Joint venture”
“Joint
venture”
shall
be
used
when
Toyota
Motor
Corporation
(TMC)
and
a
business
partner
or
its
subsidiary
make
joint
investment
to
establish
or
acquire
a
joint
venture
company
and
have
such
joint
venture company
conduct
businesses for
the purposes
of the subject joint venture
2
Materiality
standards
for
“Important
business
alliances and important joint
ventures”
*1
(1)
Monetary standard
In
case
TMC
plans
to
spend
50,000,000,000
Yen
or
more
in
total
for
loan
and
investment,
capital
expenditures, etc. at the beginning
of the plan
(2)
Qualitative
standard
In
case
the
subject
business
alliance
or
joint
venture
(including
with
a
dominant
competitor)
may
materially
affect
TMC’s
management
in
terms
of
sales, profits, etc.
(3)
Launching of new projects:
1
Definition of “Launching of new projects”
Used
when
TMC
launches
a
business
not
relating
to
its
existing
business
areas
(such
as
automobiles,
industrial
vehicles,
housing,
information
and
telecommunication,
boats
and
ships,
airplanes,
biotechnology or financial businesses)
Items
Standard
Other
than
launch
of
business
by
TMC
itself,
launch
of
business
through
business
alliance
or
through
its
subsidiary
or
joint
venture
company
(excluding
companies
in
which
TMC
invests
without
being
required
to
include
such
companies’
operating
results
in
its
consolidated
financial
statements
pursuant
to
the
Financial
Instruments
and
Exchange
Act)
shall
also be considered as “launching of new projects”
(4)
Decision
on filing
a
lawsuit or
an appeal,
or closing
an important dispute
*2
:
1
Monetary standard
In
case
that
value
of
subjects
(amount
TMC
sues
for
or
amount
to
be
borne
by
TMC
*3
)
is
10,000,000,000
Yen or more
2
Qualitative standard
In
case
of
legal
actions
such
as
filing
of
legal
action
with
respect
to
important
intellectual
property
rights
or
dispute
with
a
public
entity
with
respect
to
environmental
issues,
which
may
materially
affect
TMC’s
management,
business, rights or brand image, etc.
(*1)
Materiality standards for “important business
alliances and important
joint ventures”
If a
business
alliance
or joint
venture
falls
under
either the
“Monetary
standard” or
“Qualitative
standard”, it
shall be submitted to the Board of
Directors.
(*2)
Materiality standards for “Decision on filing
a lawsuit or an appeal, or closing an important
dispute”
If
a
case
falls
under
either
“Monetary
standard”
or
“Qualitative
standard”,
it
shall
be
submitted
to
the
Board
of Directors.
Appendix
3
Items
Standard
(1)
Materiality
standards
for
“Assumption
of
offices
of
and
resignation
from
a
director’s
position
in
important associations”:
In
case
that
Members
of
the
Board
of
Directors
or
Operating
Officers
of
TMC
assume
or
resign
from
a
position
such
as
chairman,
board
chairman,
committee
chairman,
etc.
of
Japan
Business
Federation,
The
Japan
Chamber
of
Commerce
and
Industry,
Japan
Association
of
Corporate
Executives,
Japan
Automobile
Manufacturer
Association,
Counsel
of
government
authorities
or
other
important
associations comparable to these
associations
(2)
Materiality
standards
for
“Changes
in
important
working conditions”:
In
case
that
certain
actions
such
as
changes
in
working
conditions
with
respect
to
employment
which may
materially
affect
TMC’s management
and
employees
Appendix
4
Materiality standard for
“licensing, acquisition or transfer
of important intellectual
property rights”
Certain
actions
such
as
licensing
of
intellectual
property
rights
relating
to
TMC’s
essential
technologies
or
transfer
of
TMC’s
trademark,
which
may
materially
affect
TMC’s
management,
such
licensing,
transfer
or
acquisition shall be deemed material.
Appendix
5
Items
Standard
(1)
Incorporation,
dissolution,
acquisition
and
transfer
of subsidiaries:
1
Definition
of
“Incorporation,
dissolution,
acquisition and transfer of
subsidiaries”
(1)
“Subsidiary”
A
joint
stock
company
of
which
TMC
holds
a
majority
of
its
voting
rights,
or
other
companies
judged
to
be
a
subsidiary
of
TMC
pursuant
to
Article
3
of
the
Implementation
Rules
of
the
Companies
Act
(including
a
membership
company
such
as
a
limited
liability
company,
a
partnership,
any other business entities similar
thereto)
(2)
“Incorporation”
Used when a subsidiary is established
(3)
“Dissolution”
Used when a subsidiary is dissolved
(4)
“Acquisition”
Used
when
a
subsidiary
is
obtained
through,
for
example,
acquisition
of
shares
(excluding
cases
which fall under incorporation)
(5)
“Transfer”
Used
when
a
company
loses
its
status
as
a
subsidiary
of
TMC
through,
for
example,
TMC’s
sale
of
shares
of
the
subsidiary
(excluding
cases
which
fall
under
dissolution)
(2)
Important
group managerial matters:
Matters
will
be
submitted
in
accordance
with
the
company’s
submission
standard
in
cases
where
business
operation
of
subsidiaries
may
have
a
great
influence
on
the
company’s
group
management
or
reputation.
Such
cases
include
“Disposition
and
acquisition
of
important
property”,
“Borrowings
of
a
large
amount
of
money”, “Business alliances and joint
ventures” and “Launching of new projects.”
However,
such
submission
may
be
omitted,
in
the
case
where
submission
of
a
matter
is
a
formality,
the
matter
virtually
requires
no
managerial
decision
(transfer
of
land/equipment
conducted
between
wholly
owned subsidiaries etc.) and the matter
is judged not to have materiality.
Appendix
6
Items
Standard
(1)
Report of the execution
status of business:
Improve
contents
of
report
to
the
supervision
side
while
enhancing
the
decision-making
process
by
operating officers
(1)
Progress
of
important
investment
in
new
businesses
and
risk
taking
status
shall
be
reported
as
appropriate
(2)
As
for
report
by
in-house
company/region,
the
annual
plans
will
be
confirmed
in
the
Hoshin
Guideline.
As
for
other
organizations,
report
will
be
made
by
project
(Outside
Board
Member
Meeting
can be utilized)
(3)
Progress
of
initiatives
for
important
strategy/
mid-to
long-term
challenges
shall
be
reported
as
appropriate
(e.g.,
matters
related
to
sustainability,
corporate governance, and risk management,
etc.)
Exhibit
2.5
DESCRIPTION
OF
THE
AMERICAN
DEPOSITARY
SHARES
The
terms
of
the
American
Depositary
Shares,
or
ADSs,
are
contained
in
the
amended
and
restated
deposit
agreement
dated
as
of September
21,
2021
among
Toyota Motor
Corporation,
or
Toyota, The
Bank of
New
York
Mellon,
as
depositary,
and
Owners
and
Holders
(as
defined
below).
The
principal
executive
office
of
the
depositary is located at 240 Greenwich
Street, New York, New York 10286.
Each
ADS
represents
an
ownership
interest
in
ten
shares
of
Toyota’s
common
stock,
which
shares
are
held
with
a
custodian
for
the
depositary,
currently
Sumitomo
Mitsui
Banking
Corporation.
ADSs
may
be
certificated
securities
evidenced
by
American
Depositary
Receipts,
or
ADRs,
or
uncertificated
securities.
Subject
to
the
conditions set forth in “— Limitations
on Delivery, Registration
of Transfer and Surrender of ADSs”:
ADSs
evidenced
by
ADRs,
when
the
ADRs
are
properly
endorsed
or
accompanied
by
proper
instruments
of
transfer,
will
be
transferable
as
certificated
registered
securities
under
the
laws
of
the
State of New York; and
ADSs
not
evidenced
by
ADRs
will
be
transferable
as
uncertificated
registered
securities
under
the
laws
of the State of New York.
The following
is a summary
of
the material
provisions
of the
deposit agreement,
and
thus it does
not contain
all
information
that
may
be
relevant
to
Owners
and
Holders.
Investors
should
read
the
entire
deposit
agreement
(including
the
form
of
ADR)
for
complete
information.
Toyota
has
filed
a
copy
of
the
form
of
deposit
agreement
as
an
exhibit
to
Toyota’s
annual
report
on
Form
20-F,
which
can
be
accessed
on
the
SEC’s
website
(https://www.sec.gov). Capitalized terms
used but not defined have the meanings
stated in the deposit agreement.
Owners
and
Holders
“Owner”
means
the
person
in
whose
name
ADSs
are
registered
on
the
books
of
the
depositary
maintained
for that
purpose.
“Holder”
means
any
person
holding
an
ADR or
a
security
entitlement
or other
interest
in
ADSs,
whether
for
its
own
account
or
for
the
account
of
another
person,
but
that
is
not
the
Owner
of
that
ADR
or
those
ADSs.
The
depositary,
notwithstanding
any
notice
to
the
contrary,
may
treat
the
Owner
of
ADSs
as
the
absolute
owner thereof for
the purpose of
determining the
person entitled
to distribution of
dividends or other distributions
or
to
any
notice
provided
for
in
the
deposit
agreement
and
for
all
other
purposes,
and
neither
the
depositary
nor
Toyota will
have
any obligation
or
be subject
to
any
liability
under the
deposit
agreement
to
any Holder
of
ADSs
(but only to the Owner of those ADSs).
Deposit
of
Shares
and
Delivery
of
ADSs
Shares
of
Toyota
common
stock,
or
the
“Shares,”
deposited
with
the
custodian
must
be
accompanied
by
documents specified
in
the
deposit
agreement.
The custodian
will
hold all
deposited
Shares
for
the account
of the
depositary.
Owners
and
Holders
thus
have
no
direct
ownership
interest
in
the
Shares
and
are
not
entitled
to
the
rights of
holders
of
Shares. Owners
and Holders only
have those
rights
as are
contained in
the deposit
agreement.
The
custodian
will
also
hold
any
additional
securities,
property
and
cash
received
on
or
in
substitution
for
the
deposited Shares. The deposited Shares and any additional
items are referred
to as deposited securities.
Upon
each
deposit
of
Shares,
receipt
of
related
delivery
documentation
and
compliance
with
the
other
provisions of
the
deposit
agreement,
including the
payment
of
all fees,
expenses, taxes
and governmental
charges
that
may
apply,
the
depositary
will
deliver
to
or
upon
the
order
of
the
person
or
persons
entitled
thereto
the
number
of
ADSs
issuable
in
respect
of
that
deposit.
However,
the
depositary
will
deliver
only
whole
numbers
of
ADSs.
Surrender
of
ADSs
and
Withdrawal
of
Deposited
Securities
Subject
to
the
terms
and
conditions
of
the
deposit
agreement,
Owners
are
entitled
to
delivery
(to
the
extent
delivery
can
then
be
lawfully
and
practicably
be
made)
of
the
deposited
securities
underlying
the
ADSs
upon
surrender
of
ADSs
to
the
depositary
with
delivery
instructions
for
the
deposited
securities.
In
addition,
Owners
must
pay
all
fees,
expenses,
taxes
and
governmental
charges
that
may
apply.
Upon
satisfaction
of
the
applicable
requirements, the
depositary
will direct
the
custodian to
deliver to
the surrendering
Owner
or to or
upon the order
of the person
or
persons designated
in the
delivery
instructions, the
amount
of deposited
securities
represented by
the surrendered ADSs.
Dividends
and
Other
Distributions
on
Deposited
Securities
Toyota
may
make
various
types
of
distributions
with
respect
to
the
deposited
securities.
The
depositary
will
take the following actions with respect
to such distributions.
Cash
The depositary
will convert
cash
dividends
or
other
cash
distributions
from foreign
currency to
U.S.
dollars,
if this
can be
done on a
reasonable
basis, and
promptly distribute
the
amount thus
received
to the
Owners entitled
to it.
If the
depositary determines
that
the foreign
currency
it received
is not convertible
on a reasonable
basis, the
depositary
may
either
distribute
the
foreign
currency
received
to,
or
hold
the
foreign
currency
it
cannot
convert
for
the
respective
accounts
of,
the
Owners
entitled
to
receive
them.
The
depositary
will
not
invest
the
foreign
currency
and
it
will
not
be
liable
for
interest.
If
the
exchange
rates
fluctuate
during
a
time
when
the
depositary
cannot convert the foreign currency,
you may lose some or all of the value
of the distribution.
The
depositary
will
endeavor
to
distribute
cash
in
a
practicable
manner,
and
may
deduct
any
taxes
required
to
be
withheld,
its
fees,
any
expenses
of
converting
foreign
currency
and
transferring
funds
to
the
United
States,
and
other
expenses
and
adjustments.
The
depositary
will
distribute
only
whole
U.S.
dollars
and
cents
and
will
round fractional cents to the
nearest whole cent.
Shares
In
the
case
of
a
distribution
in
Shares,
the
depositary
may
execute
and
deliver
additional
ADSs
to
evidence
the number
of ADSs representing
those Shares.
Only whole ADSs will
be issued. Any Shares
that would result
in
fractional
ADSs
may
be
sold
and
the
net
proceeds
distributed
to
the
Owners
entitled
thereto.
If
the
depositary
does not
deliver
additional
ADSs and
Shares
or ADSs
are not
sold,
the
existing ADSs
will
also represent
the new
Shares.
Rights
In
the
case
of
a
distribution
of
rights
to
subscribe
for
additional
Shares
or
other
securities,
the
depositary
may, to the extent deemed by it to
be lawful and practical:
if
requested
by
Toyota,
grant
to
all
or
certain
Owners
rights
to
instruct
the
depositary
to
purchase
the
securities
to
which
the
rights
relate
and
deliver
those
securities
or
ADSs
representing
those
securities
to
Owners;
if requested
by Toyota, deliver the rights
to or to the order of certain
Owners; or
sell
the
rights
to
the
extent
practicable
and
distribute
the
net
proceeds
of
that
sale
to
Owners
entitled
to
those proceeds.
To
the
extent
rights
are
not
exercised,
delivered
or
disposed
of
as
described
above,
the
depositary
will
permit
the
rights
to
lapse
unexercised.
In
that
case,
you
will
receive
nothing.
U.S.
securities
laws
may
restrict
the
ability
of
the
depositary
to
distribute
rights
or
ADSs
or
other
securities
issued
on
exercise
of
rights
to
all
or
certain Owners, and the securities
distributed may be subject to
restrictions on transfer.
Toyota
has
no
obligation
to
file
a
registration
statement
under
the
Securities
Act
to
make
any
rights
available to Owners. Any sale or lapse of rights
may reduce Owners’ equity interest
in Toyota.
Other
Distributions
In
the
case
of
a
distribution
of
securities
or
property
other
than
those
described
above,
the
depositary
will
distribute
such
securities
or
property
to
the
Owners
entitled
to
them
in
any
manner
it
deems
equitable
and
practicable.
If
the
depositary
believes
that
such
distribution
cannot
be
made
proportionately
among
the
Owners
entitled
thereto
or
it
deems
such
distribution
not
to
be
lawful
and
feasible,
it
may
adopt
such
other
method
as
it
may
deem
equitable
and
practicable
for
effecting
the
distribution,
including
selling
such
securities
or
property
and distributing any net proceeds as
cash to the Owners entitled thereto.
The
depositary
may
choose
any
practicable
method
of
distribution
for
any
specific
Owner,
including
the
distribution
of
foreign
currency,
securities
or
property,
or
it
may
retain
such
items
on
behalf
of
the
Owner
as
deposited
securities.
This
means
that
you
may
not
receive
the
distributions
we
make
on
our
Shares
or
any
value
for them if
it is illegal
or impractical
for
us to make them
available to
you. Further, there
can be no assurance
that
the
depositary
will
be
able
to
convert
any
currency
at
a
specified
exchange
rate
or
sell
any
property,
rights,
Shares
or
other
securities
at
a
specified
price,
nor
that
any
of
those
transactions
can
be
completed
within
a
specified time period.
Record
Date
The
depositary
may
fix
a
record
date
for
determining
the
Owners
who
will
be
entitled
to
receive
distributions,
receive
notices,
or
act
on
other
matters.
This
record
date
will
be
as
near
as
practicable
to
the
corresponding record date set by Toyota
with respect to Shares.
Voting
of
Deposited
Shares
After
receiving
voting
materials
from
Toyota
and
if
Toyota
requests,
the
depositary
will
notify
the
Owners
of
any
shareholders’
meeting.
This
notice
will
describe
how
the
Owner
may
instruct
the
depositary
to
exercise
the
voting
rights
for
the
Shares
represented
by
the
Owner’s
ADSs. If
the
depositary
receives
instructions
from
an
Owner of ADSs
on or before
a date set
by the depositary,
the depositary
will endeavor to
the extent practicable
to
vote the amount
of Shares represented
by those ADSs in accordance with such
instructions. If the depositary
does
not
receive
instructions
from
an
Owner
with
respect
to
a
matter
and
an
amount
of
ADSs
of
that
Owner
on
or
before
the
date
established
by
the
depositary
for
that
purpose,
the
depositary
will
deem
that
Owner
to
have
instructed
the
depositary
to
give
a
discretionary
proxy
to
a
person
designated
by
Toyota
to
vote
the
number
of
Shares represented
by
that
amount of
ADSs
as to
that
matter.
However, no
such
instruction
will be
deemed given
and
no
such
discretionary
proxy
will
be
given
with
respect
to
any
matter
unless
Toyota
provides
written
confirmation
to
the
depositary
that
(x)
it
wishes
such
a
proxy
to
be
given,
(y)
it
reasonably
does
not
know
of
any
substantial opposition to the matter,
and (z) the proposal is
not materially adverse to
the interests of shareholders.
It
is
possible
that
Owners
will
not
have
the
opportunity
to
cause
the
voting
rights
pertaining
to
the
Shares
represented
by
their
ADSs
to
be
exercised
according
to
their
preferences.
The
depositary
will
not
itself
exercise
any
voting
discretion.
Furthermore,
neither
the
depositary
nor
its
agents
are
responsible
for
any
failure
to
carry
out any voting instructions
with respect
to deposited
securities, for
the manner in
which any vote
is cast or
for the
effect
of
any
vote.
This
means
that
there
may
be
nothing
you
can
do
if
the
Shares
represented
by
your
ADSs
are
not voted as you requested.
Notices
and
Reports
If Toyota
takes
or decides
to
take
(i) certain
corporate
actions,
such
as making
cash
or other
distributions,
or
granting
rights,
on
deposited
securities,
setting
a
record
date
for
a
vote
or
redeeming,
replacing
or
cancelling
deposited
securities,
or
(ii)
an
action
that
effects
or
will
effect
a
change
of
the
name
or
legal
structure
of
Toyota,
or
that
effects
or
will
effect
a
change
to
the
Shares,
Toyota
may
request
that
the
depositary
disseminate,
as
promptly
as
practicable
at
Toyota’s
expense,
related
notices,
reports
and
communications
to
all
Owners
or
otherwise
make
them
available
to
Owners
in
a
manner
that
Toyota
specifies
as
substantially
equivalent
to
the
manner
in
which
those
communications
are
made
available
to
holders
of
Shares
and
compliant
with
the
requirements of any securities
exchange on which the ADSs are at such time
listed.
Inspection
of
Transfer
Books
The
depositary
will
keep
a
register
of
all
Owners
and
outstanding
ADSs,
which
will
be
open
for
inspection
by Owners at the
depositary’s office,
but only for
the purpose of
communicating with Owners regarding
Toyota’s
business or a matter related
to the deposit agreement or
the ADSs.
Disclosure
of
Interests
When
required
in
order
to
comply
with
applicable
laws
and
regulations
or
its
articles
of
incorporation,
Toyota
may
from
time
to
time
request
each
Owner
and
Holder
to
provide
to
the
depositary,
and
each
Owner
and
Holder agrees to provide and consents to the
disclosure of, information
relating to:
the capacity
in which it holds ADSs;
the
identity
of
any
Holders
or
other
persons
or
entities
then
or
previously
interested
in
those
ADSs
and
the nature of those interests;
and
any other
matter where disclosure of such
matter is required for
that compliance.
Tender
and
Exchange
Offers;
Redemption,
Replacement
or
Cancellation
of
Deposited
Securities
The
depositary
will
not
tender
deposited
securities
in
any
voluntary
tender
or
exchange
offer
unless
instructed
to
do
so
by
an
Owner
surrendering
ADSs
and
subject
to
any
conditions
or
procedures
the
depositary
may establish.
If
deposited
securities
are
redeemed
for
cash
in
a
transaction
that
is
mandatory
and
binding
on
the
depositary
as
a
holder
of
deposited
securities,
the
depositary
will
call
for
surrender
of
a
corresponding
number
of
ADSs
on
a
pro
rata
basis
and
distribute
the
net
redemption
money
to
the
Owners
of
called
ADSs
upon
surrender
of those ADSs.
If there
is any
change in
the deposited
securities
such as a
subdivision, combination
or other reclassification,
or any
merger,
consolidation,
recapitalization
or reorganization
affecting
Toyota
in
which the
depositary
receives
new
securities
or
other
property
in
exchange
for
or
in
lieu
of
the
old
deposited
securities
(a
“replacement”),
the
depositary
will
hold
such
new
securities
or
other
property
as
deposited
securities
under
the
deposit
agreement.
However,
if
the
depositary
decides
it
would
not
be
lawful
or
practical
to
hold
such
new
deposited
securities
because
those
new
deposited
securities
could not
be
distributed
to
Owners
or
for
any
other
reason,
the
depositary
may instead sell the new deposited
securities and distribute
the net proceeds upon surrender of the
ADSs.
If there is
a replacement
and the depositary
will continue to
hold the new deposited
securities, the
depositary
may
call
for
the
surrender
of
outstanding
ADRs
to
be
exchanged
for
new
ADRs
specifically
describing
the
new
deposited
securities
and
the
number
of
new
deposited
securities
represented
by
each
ADS.
If
the
number
of
Shares
represented
by
each
ADS
decreases
as
a
result
of
a
replacement,
the
depositary
may
call
for
surrender
of
the
ADSs
to
be
exchanged
for
a
lesser
number
of
ADSs
and
may
sell
ADSs
to
the
extent
necessary
to
avoid
distributing
fractions
of
ADSs in
that
exchange
and distribute
the
net
proceeds
of
that
sale
to
the Owners
entitled
to them.
Amendment
and
Termination
of
Deposit
Agreement
Toyota
and
the
depositary
may
jointly
amend
the
deposit
agreement,
and
by
so
doing,
the
rights
of
Owners.
The
Owners
must
be
given
at
least
30
days’
notice
of
any
amendment
that
imposes
or
increases
any
fees
or
charges
(except
for
taxes
and
other
charges
specifically
payable
by
Owners
under
the
deposit
agreement),
or
that
would
otherwise
prejudice
any
substantial
existing
right
of
Owners.
Every
Owner
and
Holder,
at
the
time
any
amendment
so becomes
effective,
will
be deemed,
by
continuing
to
hold
ADSs or
any
interest
therein,
to consent
and agree
to
that amendment
and
to
be bound
by the
deposit
agreement
as amended
thereby. No
amendment may
impair any Owner’s
right to surrender
ADSs and receive
delivery of the
deposited securities represented
by them,
except to comply with requirements
of law.
Toyota
may
initiate
termination
of
the
deposit
agreement
by
notice
to
the
depositary.
The
depositary
may
initiate
termination
of
the
deposit
agreement
if
(i)
60
days
have
expired
after
it
delivered
to
Toyota
a
resignation
notice
and
a
successor
depositary
has
not
accepted
its
appointment,
or
(ii)
certain
events
have
occurred,
such
as
certain
insolvency
events
relating
to Toyota,
certain
delisting
events relating
to the
Shares
or
ADSs,
distributions
that
represent
a
return
of
substantially
all
the
value
of
the
deposited
securities,
there
being
no
deposited
securities,
or
the
deposited
securities
becoming
become
apparently
worthless.
If
termination
of
the
deposit
agreement
is
initiated,
the
depositary
will
terminate
the
deposit
agreement
by
providing
at
least
90
days’
prior
notice to all Owners.
At
any
time
after
the
termination
date,
the
depositary
may
sell
the
deposited
securities
then
held
and
hold
the
net
proceeds
from
those
sales,
uninvested,
unsegregated
and
without
liability
for
interest,
for
the
pro
rata
benefit
of
the
Owners
of
ADSs
that
remain
outstanding.
After
making
the
sale,
the
depositary
will
have
no
obligations
except
to
account
for
those
proceeds
and
other
cash
and
as
described
in
the following
sentence.
After
the
termination
date,
the
depositary
will
continue
to
receive
distributions
on
deposited
securities
(that
have
not
been
sold),
may
sell
rights
and
other
property
as
provided
in
the
deposit
agreement,
and
deliver
deposited
securities
(or
sale
proceeds)
upon
surrender
of
ADSs
(after
payment
or
upon
deduction
of
fees,
expenses,
taxes
and governmental charges) to Owners who surrender
their ADSs.
After the termination date:
the depositary
will not accept deposits
of Shares or deliver ADSs;
the
depositary
may
refuse
to
accept
surrenders
of
ADSs
for
the
purpose
of
withdrawal
of
deposited
securities (that have not been
sold);
the
depositary
will
not
be
required
to
deliver
cash
proceeds
of
the
sale
of
deposited
securities
until
all
deposited securities have been sold;
and
the
depositary
may
discontinue
the
registration
of
transfers
of
ADSs
and
suspend
the
distribution
of
dividends
and
other
distributions
on
deposited
securities
to
the
Owners
and
need
not
give
any
further
notices or perform any further
acts under the deposit agreement
except as provided therein.
Limitations
on
Delivery,
Registration
of
Transfer
and
Surrender
of
ADSs
The depositary or the custodian may refuse
to:
deliver,
register a transfer,
or accept a surrender of ADSs;
effect
a split-up or combination
of ADRs; or
permit
the withdrawal of deposited securities
(unless the deposit
agreement provides otherwise),
until
the
depositor
of
Shares
or
the
presenter
of
the
ADR
or instruction
for registration
of
transfer
or
surrender
of
ADSs not evidenced by an ADR has:
paid all
fees, expenses, taxes and governmental
charges as required in the
deposit agreement;
provided
the
depositary
or
custodian
with
any
information
it
may
deem
necessary
or
proper,
including
without limitation, proof of
identity and the genuineness of any signature;
and
complied
with all regulations that
the depositary may establish
under the deposit agreement.
The depositary may
refuse to accept
deposits of
Shares for delivery
of ADSs or to
register transfers
of ADSs
whenever it or Toyota considers it necessary
or advisable to do so.
The
depositary
may
refuse
surrenders
of
ADSs
for
the
purpose
of
withdrawal
of
deposited
securities,
but
only for:
temporary
delays
caused
by
closing
of
the
depositary’s
register
or
the
register
of
holders
of
Shares
maintained
by
Toyota
or
the
Foreign
Registrar,
or
the
deposit
of
Shares,
in
connection
with
voting
at
a
shareholders’ meeting or the
payment of dividends;
the payment
of fees, taxes and similar
charges;
compliance
with
any
U.S.
or
foreign
laws
or
governmental
regulations
relating
to
the
ADSs
or
to
the
withdrawal of the deposited securities;
or
any
other
reason
that,
at
the
time,
is
permitted
under
paragraph
I(A)(1)
of
the
general
instructions
to
Form F-6 under the Securities Act of 1933 or
any successor to that provision.
Limitation
on
Liability
The
deposit
agreement
expressly
limits
the
obligations
and
liability
of
the
depositary,
Toyota
and
its
and
Toyota’s respective agents. The depositary
and Toyota will not be liable:
if
they
are
prevented
or
hindered
in
performing
any
obligations
by
circumstances
beyond
their
control,
including, without limitation,
requirements of law, the terms
of the deposited securities
and acts of God;
for exercising
or failing to exercise
discretion under the deposit
agreement;
if they
perform their obligations
without negligence or bad faith;
for
any
action
or
non-action
based
on
advice
or
information
from
legal
counsel,
accountants,
any
person
presenting Shares for deposit, any Owner, or
other competent person;
for
the
inability
of
any
Owner
or
Holder
to
benefit
from
any
distribution,
offering,
right
or
other
benefit
that
is
made
available
to
holders
of
deposited
securities
but
is
not,
under
the
terms
of
the
deposit
agreement, made available to
Owners or Holders; or
for any special,
consequential or punitive
damages for any breach of the terms
of the deposit agreement.
The
deposit
agreement
also
provides
that
the
depositary
and
Toyota
have
no
obligation
to
become
involved
in
any
action,
suit
or
other
proceeding
in
respect
of
any
deposited
securities
or
in
respect
of
the
ADSs
on
behalf
of any Owner or Holder or any other person.
Toyota
and
the
depositary
assume
no
obligation
nor
will
they
be
subject
to
any
liability
under
the
deposit
agreement
to
any
Owner
or
Holder,
except
that
each
agrees
to
perform
its
obligations
specifically
set
forth
in
the
deposit agreement
without
negligence
or
bad faith.
The
depositary
is not
a fiduciary
and does
not owe
a fiduciary
duty to Owners or Holders.
Liability
of
Owners
for
Taxes
Owners
must
pay
any
tax
or
other
governmental
charge
payable
by
the
custodian
or
the
depositary
on
any
ADS
or
deposited
security,
or
in
connection
with
tender
offers,
exchange
offers
and
certain
other
transactions
relating
to
the
deposited
securities.
If
an
Owner
owes
any
tax
or
other
governmental
charge,
the
depositary
may
(1)
withhold
any
dividends
or
other
distributions
or
the
proceeds
thereof,
or
(2)
sell
deposited
securities
and
deduct
the
amount
owing
from
the
net
proceeds
of
that
sale.
In
either
case
the
Owner
remains
liable
for
any
shortfall.
If
any
tax
or
governmental
charge
is
required
to
be
withheld
on
any
non-cash
distribution,
the
depositary
may
sell
the
distributed
property
or
securities
to
pay
those
taxes
and
distribute
any
remaining
net
proceeds to the Owner entitled thereto.
Direct
Registration
System
In
the
deposit
agreement,
all
parties
to
the
deposit
agreement
acknowledge
that
the
Direct
Registration
System, also referred
to as DRS, and
the Profile
Modification System, also referred
to as Profile, will apply
to the
ADSs.
DRS
is
a
system
administered
by
The
Depository
Trust
Company,
or
DTC,
that
facilitates
interchange
between
registered
holding
of
uncertificated
securities
and
holding
of
security
entitlements
in
those
securities
through DTC
and a
DTC participant.
Profile
is
a required
feature
of DRS that
allows a
DTC participant,
claiming
to
act
on
behalf
of
an
Owner
of
ADSs,
to
direct
the
depositary
to
register
a
transfer
of
those
ADSs
to
DTC
or
its
nominee and
to
deliver
those ADSs
to the
DTC account
of that
DTC participant
without receipt
by the
depositary
of prior authorization from
the Owner to register that transfer.
In
connection
with
DRS/Profile,
the
parties
to
the
deposit
agreement
acknowledge
that
the
depositary
will
not
determine
whether
the
DTC
participant
that
is
claiming
to
be
acting
on
behalf
of
an
Owner
in
requesting
a
registration
of
transfer
and
delivery
as
described
in
the
paragraph
above
has
the
actual
authority
to
act
on
behalf
of
the
Owner
(notwithstanding
any
requirements
under
the
Uniform
Commercial
Code).
In
the
deposit
agreement,
the
parties
agree
that
the
depositary’s
reliance
on
and
compliance
with
instructions
received
by
the
depositary
through
the
DRS/Profile
system
and
in
accordance
with
the
deposit
agreement
will
not
constitute
negligence or bad faith on the part
of the depositary.
Governing
Law
The deposit agreement is governed by the
laws of the State of New York.
Exhibit
12.1
CERTIFICATIONS
I, Akio Toyoda, certify that:
1.
I have reviewed
this annual report on Form 20-F of
Toyota Motor Corporation (the “Company”);
2.
Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit to
state
a
material
fact
necessary
to
make
the
statements
made,
in
light
of
the
circumstances
under
which
such statements were made, not misleading
with respect to the period
covered by this report;
3.
Based
on
my
knowledge,
the
financial
statements
and
other
financial
information
included
in
this
report
fairly
present in
all
material
respects
the
financial
condition,
results of
operations
and
cash flows
of the Company as of, and for, the periods presented
in this report;
4.
The
Company’s
other
certifying
officer
and
I
are
responsible
for
establishing
and
maintaining
disclosure
controls
and
procedures
(as
defined
in
Exchange
Act
Rules
13a-15(e)
and
15d-15(e))
and
internal control
over financial
reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f))
for
the Company and have:
(a)
Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,
to
ensure
that
material
information
relating
to
the
Company,
including
its
consolidated
subsidiaries,
is
made
known
to
us
by
others
within
those
entities, particularly
during the period in which this report
is being prepared;
(b)
Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
our
supervision,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated
the effectiveness
of
the
Company’s
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
the
effectiveness
of
the disclosure
controls
and
procedures,
as
of
the end of the period covered by this report
based on such evaluation; and
(d)
Disclosed
in
this
report
any
change
in
the
Company’s internal
control
over
financial
reporting
that
occurred
during
the
period
covered
by
the
annual
report
that
has
materially
affected,
or
is
reasonably likely to materially
affect, the Company’s internal
control over financial
reporting; and
5.
The
Company’s
other
certifying
officer
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal control
over financial
reporting,
to
the Company’s
auditors and
the Audit & Supervisory
Board
(or persons performing the equivalent
functions):
(a)
All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are
reasonably
likely
to
adversely
affect
the
Company’s
ability
to
record, process, summarize and
report financial information;
and
(b)
Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant role in the Company’s
internal control over financial
reporting.
Date: June 23, 2022
/s/
Akio Toyoda
Akio
Toyoda
President,
Member
of
the
Board
of
Directors
Toyota
Motor
Corporation
CERTIFICATIONS
I, Kenta Kon, certify that:
1.
I have reviewed
this annual report on Form 20-F of
Toyota Motor Corporation (the “Company”);
2.
Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit to
state
a
material
fact
necessary
to
make
the
statements
made,
in
light
of
the
circumstances
under
which
such statements were made, not misleading
with respect to the period
covered by this report;
3.
Based
on
my
knowledge,
the
financial
statements
and
other
financial
information
included
in
this
report
fairly
present in
all
material
respects
the
financial
condition,
results of
operations
and
cash flows
of the Company as of, and for, the periods presented
in this report;
4.
The
Company’s
other
certifying
officer
and
I
are
responsible
for
establishing
and
maintaining
disclosure
controls
and
procedures
(as
defined
in
Exchange
Act
Rules
13a-15(e)
and
15d-15(e))
and
internal control
over financial
reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f))
for
the Company and have:
(a)
Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,
to
ensure
that
material
information
relating
to
the
Company,
including
its
consolidated
subsidiaries,
is
made
known
to
us
by
others
within
those
entities, particularly
during the period in which this report
is being prepared;
(b)
Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
our
supervision,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated
the effectiveness
of
the
Company’s
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
the
effectiveness
of
the disclosure
controls
and
procedures,
as
of
the end of the period covered by this report
based on such evaluation; and
(d)
Disclosed
in
this
report
any
change
in
the
Company’s internal
control
over
financial
reporting
that
occurred
during
the
period
covered
by
the
annual
report
that
has
materially
affected,
or
is
reasonably likely to materially
affect, the Company’s internal
control over financial
reporting; and
5.
The
Company’s
other
certifying
officer
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal control
over financial
reporting,
to
the Company’s
auditors and
the Audit & Supervisory
Board
(or persons performing the equivalent
functions):
(a)
All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are
reasonably
likely
to
adversely
affect
the
Company’s
ability
to
record, process, summarize and
report financial information;
and
(b)
Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant role in the Company’s
internal control over financial
reporting.
Date: June 23, 2022
/s/
Kenta Kon
Kenta
Kon
Member
of
the
Board
of
Directors
Toyota
Motor
Corporation
Exhibit
13.1
CERTIFICATION
Pursuant
to
18
U.S.C.
Section
1350,
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002,
each
of
the
undersigned
officers
of
Toyota
Motor
Corporation,
a
Japanese
corporation
(the
Company
”),
does
hereby certify that, to such officer’s
knowledge:
1.
The
accompanying
Annual
Report
of
the
Company
on
Form
20-F
for
the
period
ended
March
31,
2022
(the
Report
”)
fully
complies
with
the
requirements
of
Section
13(a)
or
15(d)
of
the
Securities
Exchange
Act
of
1934; and
2.
Information
contained
in
the
Report
fairly
presents,
in
all
material
respects,
the
financial
condition
and
results of operations of the
Company.
By:
/s/
Akio Toyoda
Name:
Akio
Toyoda
Title:
President,
Member
of
the
Board
of
Directors
Date: June 23, 2022
By:
/s/
Kenta Kon
Name:
Kenta
Kon
Title:
Member
of
the
Board
of
Directors
Date: June 23, 2022
(A
signed
original
of
this
written
statement
required
by
Section
906
has
been
provided
to
Toyota
Motor
Corporation and will
be retained by
Toyota Motor Corporation
and furnished to the U.S. Securities
and Exchange
Commission or its staff upon request.)